IKEA GROUP

Ingka Holding B.V. and

its controlled entities

YEARLY
SUMMARY
FY16
 WE ARE ON HIGHLIGHTS
A JOURNEY OF THE YEAR

TABLE OF
CONTENTS 4 12

ITS THE PEOPLE PUTTING PEOPLE

WHO MAKE IKEA CHANGING AND PLANET
GREAT CUSTOMER POSITIVE
NEEDS IN
FOCUS

26 38 66

FINANCE GOVERNANCE,
MANAGEMENT
AND SUPERVISORY
BOARD The financial year 2016 (referred to as FY16) of the IKEA Group (Ingka Holding B.V.
and its controlled entities) refers to the period between 1 September 2015 and
31 August 2016 and the entities controlled by Ingka Holding B.V. during this time.

The IKEA Group franchises the IKEA retail system and methods from Inter IKEA
Group B.V. in the Netherlands. Inter IKEA Group B.V. is the owner of the IKEA
Concept and the worldwide IKEA franchisor.

78 88 On 31 August 2016 we sold our product development, supply chain and production
companies to Inter IKEA Group.
WE ARE
ON A
JOURNEY
IKEA was founded seven decades ago in the rugged
landscape of Smland in southern Sweden. Life here
wasnt always easy. To make ends meet, people had to
be resourceful, work hard together and make a lot out of
a little. This heritage formed our business, and although
IKEA is now made up of many different companies
including IKEA Group which has stores in 28 markets
around the world our values remain the same. Wherever
we are. Its our culture of togetherness, simplicity and
giving as well as taking responsibility that drives us to
constantly improve our way of working. In everything we
do, we focus on achieving our vision: to create a better
everyday life for the many people.
In recent years we have embarked on a journey towards
becoming the worlds leading multichannel home
furnishing retailer. Going forward well meet changing
customer needs by being even more accessible and
continuously improving the customer experience. All
around the world, co-workers who share our values
make IKEA what it is both today and tomorrow.

THE IKEA VISION | WERE GROWING IKEA TOGETHER | HOW WE BECAME EXPERTS ON FAMILY LIFE AT HOME 3
THE IKEA
VISION
TO CREATE A BETTER EVERYDAY LIFE
FOR THE MANY PEOPLE

Our vision guides us in every aspect of our business. We

work hard together to offer quality products at affordable
prices for our customers, and to be accessible when and
where people need us. Our vision goes beyond home
furnishings we want to create a better everyday for all
people touched by our business.

Our business idea is to offer a

wide range of well-designed,
functional home furnishing
products at prices so low that
as many people as possible
will be able to afford them.

THE IKEA VISION | WERE GROWING IKEA TOGETHER | HOW WE BECAME EXPERTS ON FAMILY LIFE AT HOME 4
 WERE GROWING
IKEA TOGETHER
To create a better everyday life for
the many people we have a fan-
tastic vision that guides us, today
and into the future. And thanks to
the great work of all co-workers,
we continue to inspire more vis-
itors and customers to visit the
IKEA stores and websites.
FY16 was in many ways a remark-
able year. Together, we rallied
around food and life in and around
the kitchen with the theme It
Starts with the Food. We created a
movement, meeting and bringing
people together around food in
new ways. And we made the food
served and sold in our stores more
healthy and sustainable.
As part of our sustainability
agenda, we continued to invest in
renewable energy. By the end of
FY16, we have committed to own
and operate 327 wind turbines
around the world and have
invested in 730,000 solar
panels on our buildings
worldwide. Whether its
doing our part to tackle
climate change by
offering 100% LED,
or cotton from
more sustaina-
ble sources, we
THE IKEA VISION | WERE GROWING IKEA TOGETHER | HOW WE BECAME EXPERTS ON FAMILY LIFE AT HOME
will continue to invest in commit-
ments to make a positive difference
for people and the planet, in our
own business and beyond.
Investing in people is about giving
people a chance to grow, both as
individuals and in their professional
roles. We want to attract, develop
and retain people with diverse
talents. Because when they grow,
so does our business.
And IKEA Group continues to
grow, in most markets and in
all sales channels. As a result of
everyones hard work, sales grew
to EUR 34.2 billion. Together with
the rental income from the shopping
centrebusiness (IKEA Centres),
total revenue increased by 7.4%
to EUR 35.1 billion.
During the year, we also prepared
for a big change. On 31 August
2016 we sold our product develop-
ment, supply chain and production
companies to Inter IKEA Group.
Following this change, and as a new
financial year starts, IKEA Group
has a new organisation in place,
ready to focus on bringing us
closer to customers to meet their
ever-changing needs whether
its through stores, Pick-up and
Order Points or online. We are in a
good place and we have an excit-
ing journey ahead. We are getting
ready to open stores in India and
Serbia, and continue to expand in
the markets we are already in.
We do not only want to grow we
want to do so in a purposeful way.
Our growth and profitability gives
us freedom to choose our own
way, the flexibility to move fast
and the independence to think and
invest long term. Its also crucial in
delivering to our vision. Thats why,
as we move into the future, we will
continue to have a strong focus on
building value for customers, and
on continuous growth and efficiency
in our operations. It will mean that
we use our resources and capabil-
ities in new ways and unlock en-
tirely new opportunities. We have
a fantastic journey ahead of us
and we are only getting started.
PETER AGNEFJLL
President and CEO,
IKEA Group
Ingka Holding B.V.
and its controlled entities
5
HOW WE BECAME EXPERTS
ON FAMILY LIFE AT HOME
More than twenty years ago, we embarked
on a journey to better meet the needs of
some of our most important customers
families with children. It started, as it often
does, with an insight. We saw that many
families with children dont have big incomes,
and that expecting parents often face a whole
new set of needs and expenses at once,
recalls Jrgen Svensson, IKEA of Sweden.
Diapers, bibs, clothes and toys need organ-
ising. A home adapted to ensure the security
and safety of the little ones to come. Not to
mention, children grow as we know and
their needs change with time. From the
establishment of the Childrens IKEA team in
1994 all the way through to launch, Jrgen
led the work to meet the needs of families
with children with curiosity and enthusiasm
as driving forces.
And this is how we work. We are curious.
We research and ask questions. We listen
and learn from insights. Continuously and
systematically.
To learn more about life at home for fami-
lies with children, the team visited house-
holds around the world and competitors in
various markets. But in order to become
the best in the world for children and their
families, we also needed to have the best
knowledge about childrens needs and
development, Jrgen notes. So we recruit-
ed a principal and launched what we call
the Childrens School, a school for us to
THE IKEA VISION | WERE GROWING IKEA TOGETHER | HOW WE BECAME EXPERTS ON FAMILY LIFE AT HOME
PLAY IS PRETTY
SERIOUS BUSINESS
So serious, in fact, that weve con-
ducted the worlds largest research
study on the subject: the 2015 Play
Report. Among other things, it has
shown us the importance of inspiring
and enabling families to play more
together. For a better everyday life
learn from professors, doctors and experts at home.
in childrens development. And it lay the
foundation for everything.
Childrens IKEA was finally introduced to the
world in the 1998 IKEA catalogue. All the
knowledge and insights collected over the
years resulted in almost 500 new products!
Today, its hard to imagine IKEA without
In order to become the best in the world
for children and their families, we also FAMILY LIFE
IN SOUTH KOREA
needed to have the best knowledge about
childrens needs and development For IKEA Retail South Korea,
insights about peoples life at
JRGEN SVENSSON home has put Childrens IKEA at
IKEA of Sweden the very heart of the business.
In Korea, life at home is often
centred around children and chil-
the childrens range. The offer is constantly drens spaces can be found all over
developing, just as childrens needs do. the home, explainsAnnie Cho,
We always look at things from a childs per- Childrens IKEA Sales Leader,
spective, says Maria Thrn, Range Manager, IKEA Retail South Korea. We
IKEA of Sweden. Where are they in their try to show that we understand
development, and what do they need in families needs at home by inte-
that time of their life? grating Childrens IKEA products
in every department.For instance,
As people grow and their needs develop, we place baby cots and childrens
IKEA grows and develops too. We are beds next to adult beds, because
always on a journey. And we constantly Korean children often sleep in the
strive to create smarter and better ways same room as their parents up
to meet people wherever they are in life until the age of seven or eight.
and in the world.
6
HIGHLIGHTS
OF THE YEAR
We want to be a positive force in society. By ensuring
good working conditions and making our own business
more sustainable, we strive to have a positive impact
on both people and the planet. During FY16 weve The TORHAMN kitchen fronts are made out of natural
accomplished many great things that have created ash. The entire tree is used, which gives the wood
value on numerous levels. On the following pages expression character and life, while making it environ-
mentally friendly by keeping waste to a minimum.
you can read all about it.

IKEA GROUP AT A GLANCE | ALL-IN TO TACKLE CLIMATE CHANGE | CO-WORKERS LEND A HELPING HAND | IKEA MUSEUM | A FESTIVAL OF PLAY 7
IKEA GROUP IT STARTS 163,600*
WITH THE CO-WORKERS IN FY16

AT A GLANCE FOOD
Retail - 124,400
Distribution - 7,500
Shopping Centres - 2,150
COTTON AND
WOOD FROM MORE
IKEA Industry - 19,850
Range & Supply & Other - 9,700
SUSTAINABLE
Celebrating everyday life in and around
SOURCES
the kitchen, our theme for FY16, It Starts *With the change in ownership of product develop-
ment, supply chain and production companies, some
with the Food provides inspiration and 26,000 co-workers became part of the Inter IKEA
All of the cotton we
solutions for food activities, from growing
Group during FY16. use for our products
and cooking to serving and storing. comes from more

79
sustainable sources1. In FY16,
48% 61% of our wood came from more
FEMALE MANAGERS sustainable sources2, and we are
MILLION aiming for 100% in 2020.
We want a workplace where 50% of
LED BULBS

9,500
leadership positions are held by women Includes cotton grown to the Better Cotton
SOLD IN FY16
1

IKEA GROUP STORES
If each of the bulbs sold IN 28 COUNTRIES
replaced an incandescent
In addition to our 340 stores in
bulb, they could save
28 countries, at the end of FY16 we
enough energy to power
had 22 Pick-up and Order Points in
650,000 households for
11 countries, 41 Shopping Centres in
a year!*
15 countries and 38 Distribution sites
in 18 countries.
half of our co-workers are women, as
PRODUCTS ACROSS THE
IKEA RANGE
Every year we renew our range,
launching approximately 2,500 new
products, designed by our in-house
and contracted designers.
and 50% by men. Today, more than
are 48% of our managers and 33%*
of Group Management.
*This number has changed for FY17 due to new
management structure.
Standard,
by farmers working towards Better Cotton; re-
cycled cotton and more sustainable cotton from
the USA (such as the e3 Cotton Program).
2
Currently defined as Forest Stewardship Council
(FSC)-certified or recycled wood.

2.1 110 1.4

*Calculation based on the
electricity consumption of an EUR
average European household.
BILLION VISITS MILLION BILLION ONLINE
TO IKEA.COM Visits to the SALES
An increase of 9% catalogue and Across 14 IKEA

EUR 34.2 783 EUR 4.2

compared to FY15. store apps. Group markets.

100 21.6%
BILLION MILLION STORE BILLION NET PROFIT
TOTAL SALES FY16 VISITS
MILLION IKEA

425
Total sales translated into Euro
FAMILY MEMBERS CORPORATE
increased by 7.1%.

1.7
INCOME TAX
Born in 1984, IKEA FAMILY has now
Adjusted for currency impact, total
sales increased by 7.9%. MILLION SHOPPING CEN- EUR reached 100 million members. Over 10 In FY16, corporate income tax
BILLION IKEA FOOD increased to EUR 1.2 billion globally,
TRE VISITS million new members join every year
TURNOVER thats around 30,000 new members which equals an effective corporate
FY06 FY15 FY16
every day! income tax rate of 21.6% (18.9% in
17.4 31.9 34.2 Sales at our restaurants, bistros,
FY15). In FY16, our total tax bill
Swedish Food Markets, and
including other taxes and duties
In FY16, our total revenue co-worker restaurants.
amounted to approximately
was EUR 35.1 billion. EUR 1.9 billion.

IKEA GROUP AT A GLANCE | ALL-IN TO TACKLE CLIMATE CHANGE | CO-WORKERS LEND A HELPING HAND | IKEA MUSEUM | A FESTIVAL OF PLAY 8
ALL-IN TO TACKLE CLIMATE CHANGE
In December 2015, France hosted the United Nations
Climate Change Conference, officially known as the
21st Conference of Parties (COP21) in Paris.
World leaders met at the event with the objective
of achieving a universal agreement on tackling
climate change.
Every government, business and citizen has a role
to play in building a better and more sustainable
future. The Paris Agreement, which was signed at the
event, marked a turning point for humanity a com-
mitment to reducing carbon emissions to avoid the
worst effects of climate change, says Steve Howard,
Chief Sustainability Officer, IKEA Group. We truly
mobilised the business community. We Mean Busi-
ness, the coalition we were part of founding, created
a powerful platform for leading businesses to make
commitments on climate change.
IKEA Retail France lit up COP21 by installing a
20-metre-high wind turbine and 440
photovoltaic solar panels on the iconic avenue
of Champs-lyses, along with 120 bicycles, 60
swings and 7 wheels so that passers-by could create
renewable energy. Through pedalling, swinging and
running, approximately 1 millionpeople helped cre-
ate 3,000 kWh of energy, which was enough to light
800,000 LED Christmas lights for the entire holiday
season. To connect with people who couldnt visit
the event, a digital platform was created to provide
tips and ideas on how to live a more sustainable
life at home. IKEA Retail France also donated
7,000 products to the official COP21 conference
centre, which were later donated to a charity
working for the homeless in France.
IKEA GROUP AT A GLANCE | ALL-IN TO TACKLE CLIMATE CHANGE | CO-WORKERS LEND A HELPING HAND | IKEA MUSEUM | A FESTIVAL OF PLAY
Through our presence at COP21, we wanted to show
that a few simple everyday changes can help us all
live more sustainably, save money and reduce our
impact on the environment. We participated in the
conference in order to share what we stand for, what
we do to support, and to call for bold action to tackle
this issue. But we werent just addressing govern-
ments, businesses and associations, we believe that
everyone has a role to play in addressing climate
change. It will take all of us, working together, says
Carole Brozyna-Diagne, Sustainability Manager, IKEA
Retail France.
Through our active participation at COP21, IKEA
Group sent a strong message that forward-thinking
businesses support bold action on climate change.
Our colleagues at IKEA Retail France did a brilliant
job of engaging the many people at COP21. IKEA
was highly visible and made an impact through all of
our different activities. We are going all-in to tackle
climate change, for example by switching the entire
lighting range to energy efficient LED and investing
in renewable energy. We must now look at where we
can go further to make our business even more future
proof and climate positive, concludes Steve Howard.
Every government, business and HISTORY IN THE MAKING: THE PARIS CLIMATE AGREEMENT
citizen has a role to play in building The climate agreement reached at COP21 in Paris in December 2015 is a turning point in
a better, more sustainable future history. By signing the agreement, world leaders have pledged to limit global temper-
ature rise to below 2C. On Earth Day, 22 April 2016, 175 countries signed the
agreement on its first day of signature. Along with world leaders, our Chief
STEVE HOWARD
Chief Sustainability Officer, IKEA Group Sustainability Officer, Steve Howard, was present for the signing ceremony WATCH
at the UN Headquarters in New York. THE VIDEO
9

CO-WORKERS
LEND A
HELPING HAND
In FY16 and during the ongoing refugee crisis, IKEA
Group co-workers in many countries mobilised to assist
municipalities and local organisations in creating better
conditions for newly arrived refugees. Co-workers
came together and were able to provide IKEA furniture
and other necessities.
IKEA is a humanistic, values-driven
brand, company and employer with a
vision to create a better everyday life
for the many people. It is great to
see how our co-workers reflect our
values and inclusive culture and how
they contribute to the integration of
refugees into their new country and
living environment
PETRA HESSER
Human Resource Manager, IKEA Group
IKEA GROUP AT A GLANCE | ALL-IN TO TACKLE CLIMATE CHANGE | CO-WORKERS LEND A HELPING HAND | IKEA MUSEUM | A FESTIVAL OF PLAY
SWEDEN
In Sweden, all IKEA stores organised packing events
where co-workers, customers and representatives
from Save the Children came together to prepare
backpacks for children on the move and provide
them with a sense of safety, comfort and support.
More than 37,000 welcome backpacks filled with
toys and other products, mostly from the Childrens
IKEA range, were donated. Jannike Conradsen,
Project Coordinator for the initiative says, I am real-
ly proud of the amount of co-workers that have been
involved. Its so powerful to see that we really can
make a difference for those who need it the most.
DENMARK
After working closely with local municipalities,
IKEA Retail Denmark began offering trainee
positions to refugees in need of work. During their
traineeship, they are mentored by a co-worker,
and currently all five stores have refugees working
as trainees, with some progressing to take on
full-time or part-time positions. Alongside this, the
stores are also facilitating language and culture
schools to further support integration.
NORWAY
In an attempt to better connect refugees with the
local community, Jens Listrup, Store Manager, IKEA
Ringsaker, arranged a St. Lucia evening, a traditional
Swedish celebration, in the IKEA store restaurant.
With the help of the Ringsaker Red Cross and IKEA
Ringsaker, 550 people from 26 different nations
gathered, shared dinner and coffee, and built new
friendships. This was one of the most magic eve-
nings in my life working for IKEA, and I have worked
here for 16 years, says Jens.
SWITZERLAND
In close co-operation with regional authorities, IKEA
Retail Switzerland has launched the Refugee Inclusion
Project to give refugees a chance to enter the Swiss
employment market and gain experience to help them
in their future working lives. At the end of the project,
refugees will receive a letter of reference and a certificate
of work. This will help them in their future job search in
Switzerland.
CANADA
IKEA Retail Canada donated nearly EUR 130,000 worth
of IKEA home furnishing products and childrens toys to
help welcome Syrian refugees. Brendan Seale, Sustain-
ability Manager, IKEA Retail Canada, commented, By
offering donations of home furnishings for refugees, we
are not only providing the basic necessities for their new
life in Canada, but more importantly offering the com-
forts of home in a time when they need it the most.
GERMANY
IKEA Retail Germany developed the initiative Dein Ein-
satz, meaning Your Commitment with the aim to help
address the immediate need for furniture and other
necessities in local refugee centres. Co-workers chose a
project to work with and IKEA Retail Germany provided
support by donating products worth up to EUR 10,000
to those projects. Altogether, more than 500 projects
have been supported with over 16,000 refugees bene-
fitting from these initiatives.
AUSTRIA
By collecting nearly 24,000 signs of support as a signal
for solidarity, IKEA Retail Austria not only created a
sense of togetherness by involving co-workers, custo-
mers and partners, they also donated around 30,000
IKEA products to help furnish close to 50 accommoda-
tions for refugee families worth EUR 300,000. The total
value of the entire donation for the activity reached
EUR 500,000.
10
IKEA MUSEUM
The story of IKEA
In June 2016, Inter IKEA Group, the franchisor of the IKEA Concept,
opened the IKEA Museum in lmhult, Sweden. Located in the original
building that housed the very first IKEA store, which opened in 1958,
the museum features a main exhibition in three parts, a temporary
exhibition, a gift shop and a restaurant.

IKEA Museum tells the story of IKEA and how an entrepreneur from
the southern parts of Sweden, the province of Smland, together
with his co-workers decided to create a better everyday life for the
many people. Visitors are invited to explore the driving forces in
society that shaped IKEA, the people behind it, the ideas and inspi-
ration for the products but also what IKEA may be tomorrow.

To learn more about the IKEA Museum

in lmhult, Sweden, please go to:
www.ikeamuseum.com

IKEA GROUP AT A GLANCE | ALL-IN TO TACKLE CLIMATE CHANGE | CO-WORKERS LEND A HELPING HAND | IKEA MUSEUM | A FESTIVAL OF PLAY 11
A FESTIVAL
OF PLAY
In November 2015, the IKEA
Tempe store in Australia invited
families to attend the first-of-its-
kind Festival of PLAY event. The
event engaged customers around
the importance of play, both for
children and adults.
This free event made visiting the
IKEA store a playful experience
for everyone. By transforming the
store into a big playground, visitors
were able to enjoy activities like a
childrens disco, art classes, hula
hoop competitions and much more.
Taking place just before the Aus-
tralian summer, the two-day indoor
event provided a perfect playdate
opportunity. Play is an integrated
part of peoples life and when IKEA
arranges a play date, we help the
world play more, says Ludvig
Liljekvist, IKEA FAMILY & Customer
Relations Manager, IKEA Retail
Australia East.
The idea for the Festival of PLAY
event was born through a collab-
oration involving co-workers from
the sales, sustainability, and mar-
keting departments. By combining
creativity with insights from the
IKEA Play report, a research study
on the importance of play, it was
possible to create something valua-
ble for both customers and IKEA.
IKEA FAMILY members living with
children were the first to be invited
and helped launch the LATTJO
product range by previewing and
experiencing the toys first hand.
The programme of play activities
was inspired by the LATTJO book
LETS PLAY TOGETHER! creating an
adventure in-store.

IKEA FAMILY
IKEA FAMILY is free to join for everyone. From those whose homes are their
passion, to people who just like getting better deals and rewards, such as
offers on the IKEA product range, invites to special events and even more
knowledge and inspiration. IKEA FAMILY was introduced in 1984 and has
since grown to become one of the largest customer loyalty programmes in
the world. Today, IKEA FAMILY has over 100 million members.

IKEA GROUP AT A GLANCE | ALL-IN TO TACKLE CLIMATE CHANGE | CO-WORKERS LEND A HELPING HAND | IKEA MUSEUM | A FESTIVAL OF PLAY 12
 CERTIFIED SEAFOOD
FOR ALL CUSTOMERS
90% of fish stocks worldwide are either being
fished to their limits or overfished according to
the Food and Agriculture Organization of the
United Nations (FAO). We are therefore commit-
ted to source the fish and seafood that we sell
and serve in our restaurants and Swedish Food
Markets from fisheries and farms certified by the
Marine Stewardship Council (MSC) and the Aqua-
culture Stewardship Council (ASC).
The MSC and ASC certification schemes are the
worlds leading and most widely accepted labelling
MADE TO CHANGE
HLLNING COLLECTION
In Texas, IKEA Retail US has partnered with Open
Arms to sell a unique line of Texas-themed textile
products created by refugee women. Open Arms is
the non-profit social enterprise of the Multicultural
Refugee Coalition which creates livelihood opportu-
nities for refugees through a unique blend of skills-
based education and social entrepreneurship.
Using reclaimed fabric from the IKEA product range,
the FY16 limited-edition collection HLLNING was
produced at the Open Arms Shop in Austin and
was made available to three stores in Texas; IKEA

ALL-IN FOR programmes for fish and seafood from responsible

fishing and farming. IKEA Food is proud to have
Round Rock, IKEA Frisco and IKEA Houston.

RENEWABLE ENERGY become the food service provider offering the The collaboration with Open Arms not only provides
largest variety of certified seafood globally, serv- refugee women with a source of income, but it also
By 2020 IKEA Group will produce as much renewable ing and selling responsibly sourced seafood, such offers local customers a unique, limited-edition
energy as the energy we consume in our operations. as salmon, herring and shrimp to over 650 million product. IKEA Retail US will continue the partnership
As a step toward this, we are investing in the renewal customers. Making it easier for customers to make with Open Arms in FY17, making a new limited
and expansion of an existing wind farm in Ajos, Finland. more sustainable choices, while securing seafood textile collection available in all three Texas stores.
In total, once the wind farm is operational, IKEA Retail supplies for future generations. The FY17 collection is named TERSTLLA and
Finland will generate wind power equivalent to the will be launched on three occasions; aligned with
annual electricity needs of approximately 32,000 the winter holidays, on International
homes. More energy than IKEA Retail Finland uses in Womens Day and on World
all its stores and operations. Refugee Day.

IKEA Group has invested EUR 1.5 billion into renewable

energy since 2009, and in 2015 we committed another
EUR 600 million for investments in wind and solar
energy. We have committed to own and operate
327 offsite wind turbines globally, including the new
wind farm in Finland, and have 730,000 solar panels
installed on our stores and buildings worldwide. In
FY16, we produced renewable energy equivalent to
71% of the energy we use in our operations.

Figures from end of FY16

Excluding the IKEA Group shopping centre business

IKEA GROUP AT A GLANCE | ALL-IN TO TACKLE CLIMATE CHANGE | CO-WORKERS LEND A HELPING HAND | IKEA MUSEUM | A FESTIVAL OF PLAY 13
ITS THE
PEOPLE WHO
MAKE IKEA
GREAT
We believe in people. Each of our co-workers brings
their unique ideas and talent to work every day they
are what makes IKEA great. We want to make sure
every co-worker feels welcomed and valued, and has
the opportunity to develop their potential. Promoting
talent and creating a great place to work is important
to us. When co-workers grow, so does IKEA.

EVERYONE IS SEEN AS A TALENT | TACK! | HOME FURNISHING IN CHINA | NEW EMPLOYMENT STANDARDS | DIVERSITY & INCLUSION 14
EVERYONE IS For me, the Talent Focus Week confirmed

SEEN AS A TALENT
that everyone is talented in some way.
I learnt about the possibilities for
development within IKEA and also how
we as co-workers are encouraged to
grow. From a personal point of view,
its given me the confidence and
reassurance to understand
We have a unique view on talent. All co-workers are
considered a talent and everyones contribution is what Im doing now and
important to the future growth and development of where Im going in the
IKEA Group, regardless of age, background, education future
and experience. We want co-workers to feel empowered
to take the lead in their own development, and we
want leaders to be able to spot and develop talent.

This is why we developed our Talent Approach and

JAROSLAVA KARDOV
decided to run a global Talent Focus Week in April
Sales Co-worker,
2016, with the goal to launch the Talent Approach to
IKEA Prague ern
co-workers. The Talent Approach is our way to describe Most store
what we mean by talent at IKEA Group.

We believe in people and in becoming better together.

We want to enable each individual to discover their I consider myself a curious person, and it
uniqueness to perform and grow, both inside and is precisely for this reason that I decided
outside their role. We also want our leaders to spot to take part in the Talent Focus Week.
and develop talent for the future, connected to our I was lucky enough to be interviewed
business needs, says Caroline Lippers, Succession by Renata Maria Duretti, Country HR MANY WAYS
Manager, IKEA Group. Manager, IKEA Retail Italy, and TO GROW
learning about her experience
The week provided co-workers worldwide with an oppor- made me realise how IKEA With so many different
tunity to have a dialogue around the many ways to grow offers great opportunities to IKEA companies, functions,
and develop within IKEA. During the week co-workers roles and locations there
all of us
got the chance to talk more about their talents and how are many opportunities for
they can grow within their current roles but also about co-workers to grow and
what different career paths could look like. develop. To visualise the
possibilites, we launched an
We have an ambitious growth agenda. Expanding in internal digital tool called
existing and new markets, we need more co-workers IKEA Journeys, where co-
who look to become the leaders and specialists of GIOVANNI BUSDRAGHI workers share their stories
tomorrow. By staying curious, being willing to take Safety & Security to inspire others in their
Expansion Specialist,
responsibility and being open to learn new things, career journeys.
IKEA Retail Italy
there will always be opportunities to develop and grow
within IKEA, concludes Caroline Lippers.

EVERYONE IS SEEN AS A TALENT | TACK! | HOME FURNISHING IN CHINA | NEW EMPLOYMENT STANDARDS | DIVERSITY & INCLUSION 15

THE HAPPINESS INDEX
The IKEA Jerez store in Spain has
made co-worker happiness one
of their top priorities. A series of
programmes to improve co-worker
happiness have been developed
under the Happiness Index pro-
ject. The dream is to make IKEA
Jerez the best place to work for
everyone, where co-workers feel
valued and have working condi-
tions adapted to their lifestyle,
both in and outside of work. If we
have happy co-workers, we will
get happy customers, says Mayte
Fernandez, HR Manager, IKEA
Jerez store.
EVERYONE IS SEEN AS A TALENT | TACK! | HOME FURNISHING IN CHINA | NEW EMPLOYMENT STANDARDS | DIVERSITY & INCLUSION
One of the project initiatives,
called The Happyforce app, has
changed the way co-workers and
managers communicate. Clear
communication is not always easy,
and missing the smaller things can
have a big impact on a persons
happiness. To make communica-
tion simpler for everyone at the
store, the app was introduced in
May 2016.
After three months, more than
85% of the co-workers were using
the app daily, benefiting from faster
and clearer communication be-
tween co-workers and managers.
For example, allowing real-time
feedback on management
questions, receiving feedback
from co-workers and the ability to
share urgent information quickly.
A dedicated team in the HR
department analyse and evaluate
the response, and feedback the
information to the management
team at the IKEA Jerez store.
Thanks to the app more co-workers
have dared to express their opinions
and talk about what bothers them
at work. That makes it possible for
us to take action, make changes
and get happier co-workers, says
Mayte Fernandez.
Additionally, a team of eight co-
workers have formed a happiness
group to follow up on daily com-
ments, share information with
the management team and take
actions for improvements. A strat-
egy has been created to address
complex challenges and some
immediate quick action improve-
ments have been made, such as
introducing a healthier breakfast
served in the cantina.
Tack!
The IKEA Group Loyalty Programme
THE CO-WORKER
LOYALTY PROGRAMME
TACK!
Tack! is our way of showing app-
reciation to co-workers for their
loyalty and their contribution to
our continued success. Through
Tack! (which means thank you
in Swedish), co-workers receive
an additional contribution to their
pension funds. All eligible full-time
co-workers within a country recei-
ve the same amount, regardless
of their unit, position or salary.
Part-time co-workers will receive a
proportional amount in relation to
hours worked.
EUR 108
MILLION
Was set aside in FY16 for the
loyalty programme Tack!
THE ONE IKEA
BONUS PROGRAMME
The One IKEA Bonus programme is
By merely clicking a a bonus system for all IKEA Group
mood icon and ad- co-workers, based on performance.
ding comments where It is based on our values of
necessary, co-workers simplicity and togetherness, with
can share how theyre
everyone in the same unit working
feeling and if theres
towards the same objectives.
anything that theyd
Sharing goals helps us to work
like to have addressed.
together as one IKEA.
16

DEVELOPING
HOME FURNISHING
EXPERTISE IN CHINA
IKEA Retail is on a growth journey
in China. The number of stores
are planned to almost double
by 2020, new Pick-up and Order
Points are being explored, and an
e-commerce pilot was launched in
Shanghai in September 2016. Chi-
nas rapid development over the
past 30 years has resulted in a
growing middle class, especially in
urban areas. As peoples lives are
changing, their home furnishing
focus is shifting from basic functions
to looking for better things. So to-
day there is a need for inspiration
as to what better looks like, says
Licca Li, Communication & Interior
Design Manager,IKEA Retail China.
Home furnishing is our way to
engage with people to improve
their life at home. It makes IKEA
EVERYONE IS SEEN AS A TALENT | TACK! | HOME FURNISHING IN CHINA | NEW EMPLOYMENT STANDARDS | DIVERSITY & INCLUSION
In order for IKEA to lead with
home furnishing, we need to
stay tuned to the changes in
peoples life. This is our inspira-
different. tion for creating new solutions,
Roy Li, former which will support our custo-
Store Manager,
mers to realise their needs and
IKEA Shanghai
Beicai store,
dreams
LICCA LI
continues, When Communication & Interior Design Manager,
peoples incomes IKEA Retail China
are growing, so
are their needs
for home furnish-
ing. What IKEA is changing is the tion & Interior Design department
attitude towards everyday life. (Com&In). To continue to lead
Encouraging people to not accept with inspiration and home furnish-
inconvenience, but instead focus ing knowledge in a fast growing
on functionality and how to organ- market, there is a need to recruit
ise a home to reflect the needs hundreds of Com&In co-workers
and the personality of the people in China. Jeff Shi is one of them.
who live there. Already an interior designer in
Nanjing, Jeff discovered IKEA in
The home furnishing competence Shanghaiwith his wife ten years
agenda is led by the Communica- ago. We were both excited about
Visual Merchandising Leader,
IKEA Nanjing store
all the tips and ideas in the room
settings. We were sharing a flat
with my friend at the time and we
found a lot of inspiration to make
our space more functional and
beautiful. A year later, the IKEA
Nanjing store was recruiting, and
I happily applied. At IKEA I could
truly learn about home furnishing,
and how we use our expertise
to create solutions that work for
Chinese homes. Today Jeff is the
Visual Merchandising Leader at
the IKEA Nanjing store.
One way in which IKEA Retail China
is responding to the big talent
need is with the Lead with Home
Furnishing Competence Programme.
The objective is to fast track the
development of competent, crea-
JEFF SHI
tive and inspiring future Com&In
managers in Asia Pacific.
From a store perspective, Roy
says, We recruit Com&In people
a year before a store opening and
the first thing we let them do are
home visits. We want them to
understand local life at home and
what stops people from making
it better. With those insights they
can make the store reflect local
relevance and come closer to the
customers hearts. But it is not
only for Com&In co-workers. We
try to bring all co-workers closer
to our range in various activities,
inspiring them to try IKEA solu-
tions in their own homes. This
helps them design a better life at
home for themselves, and then
ROY LI
Competence Developer,
IKEA Retail China
they can inspire customers to do
the same.
Licca continues, Turning new
co-workers into ambassadors of
home furnishing and the IKEA
brand will take time. We are on
an exciting journey. The world
is changing, but it is people who
make the difference. In the end,
they are the ones that make the
IKEA brand unique. At Com&In,
we are specialists in home fur-
nishing, and we will keep devel-
oping ourselves and new solutions
to meet new needs. We want to
show that function and beauty can
go hand in hand. We believe it is
the way to realise our vision to
create a better everyday life for
the many in China.
17
A GLOBAL CALL TO ACTION
FOR GENDER EQUALITY
Inclusive and sustainable growth
is the overarching vision of the
United Nations 2030 Agenda for
Sustainable Development. Gender
equality and womens econom-
ic empowerment are central to
this vision, which is why the UN
Secretary-Generals High-Level
Panel on Womens Economic
Empowerment was launched in
January 2016.
Co-chaired by Simona Scarpaleggia,
Country Retail Manager, IKEA
Retail Switzerland, the panel
released its first report during the
United Nations General Assembly
week in September, emphasising
drivers to unlock potential for
women to fully participate in the
economy and achieve financial
independence.
SECURING NEW
EMPLOYMENT
STANDARDS
EVERYONE IS SEEN AS A TALENT | TACK! | HOME FURNISHING IN CHINA | NEW EMPLOYMENT STANDARDS | DIVERSITY & INCLUSION
Empowerment is about rights,
justice and creating a movement
that will leave no women behind.
This report is concrete and shows
good examples of how society
can come together to accelerate
womenseconomic empowerment.
Closing the gender gap is every-
ones responsibility governments,
businesses and every single indi-
vidual, says Simona Scarpaleggia.
So what are our commitments
in being part of this High-Level
Panel? We will continueto work to
achieve gender equality, promote
equal opportunities and provide
equal pay. But we will also keep
joining forces with governmental
and non-governmental organisa-
tions to contribute to a positive
change in society.
In FY16, we introduced our new Approach to Employ-
ment Standards, set to form part of our employment
offer to all co-workers. Its one of a number of elements
that impact the everyday experience of our co-workers,
and contribute to making IKEA a great place to work.
We know that attracting, developing and inspiring
co-workers requires more than salary and benefits
alone. Our approach to these standards addresses
everything from employment relationships, contracts
and scheduling to ensuring development opportunities
Photo credits: Roberto Sanchez | @rsanchezphoto
SUPPORTING HUMAN
RIGHTS & GLOBAL
DEVELOPMENT
In June 2016, the IKEA Group was invited to
the first-ever Fundamental Rights Forum to
share our position and work on human rights
and equality.
Steve Howard, Chief Sustainability Officer,
IKEA Group, attended the forum and spoke
about the role of businesses in addressing
inequality, and how we as a business strive to
connect with and reflect the diverse societies
we serve.
We should never be passive about equality.
As a diverse business in a fast-changing
world, we need to represent the society
around us. We can play a major role in
leading change by being systematic and
proactive, demonstrating clear values and
principles. If we all feel the fierce urgency
of equality, we can be the generation that
fast-tracks change, says Steve.
Our new and equality. With its global launch, we will be offering
Employment greater consistency and stability for all co-workers.
Standards provide The Fundamental Rights Forum, organ
We are a people company, and the new Approach
a consistent base
for the everyday to Employment Standards lays the foundation for
ised by the European Union Agency for
Fundamental Rights, is a new platform
co-workers to be passionate and committed home for discussing protection and awareness
experience of all
furnishing experts, creating a great experience for of Human Rights. The event was held in
co-workers Vienna in June 2016 and engaged more
customers and enabling a strong connection to IKEA,
says Neena Potenza, HR Manager, Scandinavia/North than 650 experts, activists, government
America, IKEA Group, who has been leading the officials and students.
development of the new standards.
18
BE YOURSELF - YOUR UNIQUENESS Gender diversity

MAKES US BETTER IKEA Group

(share of women)

33%*
of Group Management

Inclusion is everyones responsibility. In

FY15, we updated our Diversity & Inclusion
Approach to support managers in continuing
to create a diverse and inclusive environment
that encourages everyone to be themselves.
In FY16, we began to roll out workshops on
the updated approach, using a framework to
ensure consistency across our organisation,
by providing a simple structure to analyse
current situations, identify future goals,
and develop plans to bridge the gaps. One
important training module focuses on un
conscious bias. In addition to that, we
developed a gender equality plan, supported
by tools, materials and insights about creat-
ing gender equality in each location.
What is unconscious bias?
Unconscious biases are positive and negative
stereotypes and prejudices we have about
others. They affect our actions, decisions,
and judgements without our awareness or
intention, and impose barriers to creating
inclusion in the workplace. Therefore, we
want to understand and reduce those biases.
The purpose of the Unconscious Bias module
is to discuss the nature and types of un-
conscious biases, and to explain how bias
impacts us at work. More importantly, the
module provides co-workers with the op-
portunity to set goals and actions to reduce
their biases.
work environment, says Sari Brody, Diver-
sity and Inclusion Manager, IKEA Group. If
not handled properly, it can create divisions
among teams and provoke dissatisfaction.
Minimising unconscious bias enables us to
treat everyone fairly, include all co-workers,
regardless of their individual differences,
and provide them with equal opportunities.
Gender Equality plan
Another important area that we are focusing
on is achieving Gender Equality. This means
more than simply reaching a 50/50 gender
balance in all levels and positions. Gender
Equality is about creating an inclusive culture
where all genders are valued for their unique
contributions, and thereby they can influ-
ence our culture.
We have an ambition to create an inclusive
work environment. We want co-workers to
be able to bring their whole self to work and
make use of their individual differences and
uniqueness to benefit themselves and the
business, concludes Sari.
43%
of Extended Group
Management
48%
of all managers
AN INCLUSIVE WORK-
54% PLACE FOR EVERYONE
of all co-workers
*This number has
In 2016, we began developing an LGBT+
changed for FY17 due inclusion plan (for lesbian, gay, bisexual,
to new management transgender and all other sexual orienta-
structure
tions and gender identities) to create a fully
inclusive work environment and to contribute
to a positive change for LGBT+ inclusion in
all areas of our business. We also joined the
Workplace Pride Foundation an organisation
that strives for greater acceptance of LGBT+
people in the workplace and in society.
We want our co-workers to be
able to be themselves at work and
feel respected and supported. We
want customers to know that we
respect and support the LGBT+
community. Everyone at IKEA
Group shares a responsibility to
welcome diversity, celebrate our
differences and create an inclusive
work environment

ANTONIO CAVALLI
Unconscious bias requires awareness and
Diversity and Inclusion specialist,
management in order to create an inclusive
IKEA Group

EVERYONE IS SEEN AS A TALENT | TACK! | HOME FURNISHING IN CHINA | NEW EMPLOYMENT STANDARDS | DIVERSITY & INCLUSION 19
PUTTING
CHANGING
CUSTOMER
NEEDS IN
FOCUS
By responding quickly to customers dreams
and needs, we will continue to grow our business.
In a world of change we constantly gather insights
about peoples lives at home. We challenge ourselves
to be even more relevant by offering high quality,
affordable home furnishings and making long-term
investments, today and for the future.

IT STARTS WITH THE FOOD | DEMOCRATIC DESIGN | SERVING TODAYS CONNECTED CUSTOMERS | ABOUT IKEA CENTRES | CUSTOMER EXPERIENCE | MEETING THE MANY PEOPLE OF INDIA 20
IT STARTS THE ANYWHERE,
ALL IN FOR UTZ
WITH THE FOOD
ANYTIME DINNER
Through extensive research including
visiting homes and interviewing cus-
CERTIFIED COFFEE
tomers we learn how people live. In
2015, we surveyed 11,000 peoples At IKEA, we serve over 100 million cups of coffee
habits and attitudes towards food in big every year which is about one cup of coffee for
To make sure that we can create smarter and better cities around the world, like Shanghai, every person involved in the coffee
home furnishing solutions, we constantly learn about New York, Berlin and London. Some of industry globally. With the launch of
what life at home is like for different households around these findings are published in our Life PTR, the new IKEA coffee range is
the world. One thing we have learned is that peoples at Home report. now both UTZ certified and EU
eating habits are changing, and that this changes life
Our weekday meals have migrated to Organic certified. PTR offers
at home too. Thats why we decided last year to rally
other places. five different coffee products that
around food and life in and around the kitchen with one
customers can truly feel good
main theme It Starts with the Food. The kitchen has become a place for about. All responsibly sourced, of
any and every home activity, and high quality and with great taste
For many of us, food is a central part of life, and it meals have broken free from their tra- at affordable prices.
includes activities around food that often bring friends ditional domain and migrated to other
and family together, anywhere, anytime. This inspires places the sofa, bed, floor or desk.
us to develop our range, and to provide solutions that
reflect new habits; from growing food to cooking it, Want to know more? See the full
and from serving it to storing it. report: lifeathome.ikea.com/food New ways of living,
cooking and sharing
To reflect changing life at home, we also rebuilt the
a meal require new
room sets in most of our stores to ensure they reflect
ways of thinking and
real homes for people in the local markets. And we
approaching the way
have introduced a new cook shop in our Cooking
we enjoy food at home.
& Eating departments where the link to food is
The IKEA 365+ dinner
brought to life through recipes and inspiring films.
ware and glassware
Weve continued to make the food served and sold in
series has been devel-
our stores more healthy and sustainable. And weve
oped to make it easier
met and brought people together around food in new
for people to enjoy any
ways in and outside of our stores.
meal wherever and
whenever theyd
Co-workers from every part of the IKEA Group had an
like to.
important part to play in making the theme success
ful. By working together we are continuing this
journey to explore how we can create a better life at
home, offering products that reflect and support peoples
changing needs and dreams. The focus on food will
be unmistakable for IKEA customers as the theme
continues for another year. With new and better prod-
ucts and ideas to inspire customers to explore and
engage with the theme.

IT STARTS WITH THE FOOD | DEMOCRATIC DESIGN | SERVING TODAYS CONNECTED CUSTOMERS | ABOUT IKEA CENTRES | CUSTOMER EXPERIENCE | MEETING THE MANY PEOPLE OF INDIA 21

#STARTFOODING
IN CANADA
When it comes to food, many
find their habits get in the way
of trying new and exciting things.
So, in line with this years food
theme, IKEA Retail Canada
created an experience centre in
downtown Toronto to actively tear
those barriers down by encour-
aging people to break the rules
and #StartFooding with IKEA.
Visitors were invited to explore,
IT STARTS WITH THE FOOD | DEMOCRATIC DESIGN | SERVING TODAYS CONNECTED CUSTOMERS | ABOUT IKEA CENTRES | CUSTOMER EXPERIENCE | MEETING THE MANY PEOPLE OF INDIA
KROGEN BY IKEA
RETAIL FRANCE
To engage and inspire people to experiment with
our products in a brand new way, IKEA Retail France
launched KROGEN in the summer of 2016. KROGEN,
Swedish for the bistro, was a pop-up restaurant,
I do it my way, supported by an online platform, where people were
every day invited to become chefs for one night in the very
heart of Paris.
was a chalkboard where
visitors could share
Each evening, a three-course meal with a EUR 10
their personal food
price tag involving one IKEA Food ingredient was
confessions.
on the menu. One of 15 amateur chefs selected by
online public vote prepared the meal, coached by an
IKEA Food mentor and backed up by a professional
ACT kitchen team. These nightly kitchen adventures were
SPOONTANEOUS streamed live, encouraging viewers to engage fur-
Pop-up experience visi- ther with the projects online platform and generating
tors were equipped with more than 4 million social media views. The restau- The project came to a close after three intense weeks
a spoon. Through Radio rant space was fully equipped with IKEA home fur- of serving hundreds of happy guests and raising
Frequency IDentification nishing solutions and a specialised IKEA Food store, money for the charity organisation Secours Populaire
technology they could for any inspired home cooking experiment needs. dedicated to fighting poverty and exclusion in France.
just tap on items to add
them to their virtual
shopping cart or email
themselves recipes,
cooking tips and gar- TBAR BY IKEA RETAIL NORWAY
dening tricks. The issue of food waste was what inspired IKEA Retail
Norway to bring together some of the countrys best chefs
to run the pop-up restaurant TBAR in Oslo. The menu?
purchase and taste a variety of Filled with healthy meals created with ingredients brought
IKEA Food products in six interac- in by guests. Ingredients that might otherwise have gone
tive and inspirational rooms. The to waste. Serving a total of 750 guests during six days, the
two-week activity challenged peo- restaurant became a true inspiration hub for sharing ideas
ples expectations and perceptions on how to reduce food waste and live a sociable life in and
about IKEA, with food instead of around the kitchen.
furniture and a small pop-up shop
instead of a large warehouse dis-
play paving the way for visitors DID YOU KNOW
to be open to new experiences, tbar is the Swedish word for edible.
ideas and inspiration.
22
DEMOCRATIC DESIGN
The design of IKEA home furnishing
products starts with understand-
ing peoples everyday needs and
dreams at home. For many com-
panies, design is simply about how
something looks. Its shape. Its col-
our. For IKEA, its something bigger.
The design of IKEA home furnishing
THE FIVE DIMENSIONS
OF DEMOCRATIC DESIGN:
FORM is about the beauty of each product
and how it contributes to make you feel good
about being at home.
QUALITY means products withstanding the
wear and tear of the everyday, while lasting
longer and ageing gracefully.
FUNCTION is about how each product works
and how it makes everyday life easier and
more meaningful.
SUSTAINABILITY means producing in a
way that is good for people and the planet,
and is also about enabling people to live a
more sustainable life at home.
LOW PRICE is necessary to make our products
accessible to more of the many people.
Great products should be for the many.
We want to exceed the customers expectations
with new designs, function, sustainability, good
quality and a low price but not at any price.
We work hard throughout the entire value chain,
from idea development to product delivery, to
sustainably keep our prices low. The Democratic
Design approach has proven to be our best way
to make great design accessibleto the many
people and not only for the few. Democratic
Design is one of the tools we use to achieve our
vision of creating a better everyday life for the
many people.
IT STARTS WITH THE FOOD | DEMOCRATIC DESIGN | SERVING TODAYS CONNECTED CUSTOMERS | ABOUT IKEA CENTRES | CUSTOMER EXPERIENCE | MEETING THE MANY PEOPLE OF INDIA
products starts with understand-
ing peoples everyday needs and
dreams at home. Because we
believe everyone has the right to a
better everyday life. This belief is
why we design and develop all of
the products in the IKEA range with
five dimensions in mind form,
N Q
O UA
C TI
N TY
FU
FOR
M
SUSTAINABILITY
function, quality, sustainability and
low price. By creating products
without compromising on any of
these aspects, we become truly
unique offering a product range
at an affordable price so that as
many people as possible can enjoy
them. We call it Democratic Design.
LI
CE
PRI
LOW
A DESIGNERS
CHALLENGE
Low prices are a cornerstone of the IKEA vision,
business idea and concept. The basic thinking
behind all IKEA products is that low prices ena-
ble well-designed, functional home furnishings
to be available to everyone. Using the Demo-
cratic Design principles, IKEA designers scru-
The OFTAST series,
tinise every product idea and constantly try to
designed by
do everything a little better, a little simpler, and
Henrik Preutz,
always more cost-efficient. Designer, IKEA of Sweden.
FORM I gave the plates and bowls
a timeless, functional and harmonious
form that makes both the manu-
facturing and transport efficient.
QUALITY I chose to use the
material tempered glass, which is
thin and elegant, yet durable. Perfect
for coping with the demands of
customers everyday usage.
FUNCTION A bowl is an important
piece in the everyday life in the
kitchen and you can use it in so many
different ways. The size of the OFTAST
bowl is really versatile. It works just
as well as a rice bowl or as a serving
bowl for snacks.
SUSTAINABILITY Manufacturing
and transporting efficiently is impor-
tant to not waste energy and resour-
ces. At IKEA, we design products to
reduce packaging and the amount of
air that gets shipped.
LOW PRICE The challenge when
I designed OFTAST was to combine
good function with a very low price.
The recommended price is now EUR
0.50, making it affordable for the
many people.
23

A MORE
VITAL IKEA
We always want to give customers
inspiration and a reason to visit
IKEA. In addition to the products
that we create for our global range,
every year we introduce approxi-
mately 2,500 new products, includ-
ing seasonal collections and market
specific offers.
Limited-edition collections are
another way to surprise custom-
ers. By collaborating with de-
signers and creative artists we
IT STARTS WITH THE FOOD | DEMOCRATIC DESIGN | SERVING TODAYS CONNECTED CUSTOMERS | ABOUT IKEA CENTRES | CUSTOMER EXPERIENCE | MEETING THE MANY PEOPLE OF INDIA
can explore interesting ideas and
expressions, whilst also develop-
ing new ways of working, such as
production methods and using
new materials in new ways. In
2016, we launched a limited-edi-
tion collection in collaboration with
British fashion designerKatie Eary,
who is well known for her colourful
digital print designs. By working
with a designer from the fast-
paced fashion industry, we had the
opportunity to learn new ways to
The GILTIG
collection by
Katie Eary
help speed up production process-
es. We come from a heritage of
furniture design, and these fash-
ion designers can bring a new way
of thinking and looking at patterns
or products that we havent really
explored before, says Per Kro-
kstde, Business Leader, Vitality
Collections, IKEA of Sweden.
For the GILTIG collection, we had
to overcome the production chal-
lenge of adapting Katies unique 2D
The GILTIG
designs to IKEA products.Henrik
collection Most, Creative Leader, IKEA of
by Katie Sweden, explains, We can learn
Eary
a lot from how fashion designers
work with colours, prints, patterns
and shapes. They constantly re-in-
vent themselves and what they
do and are used to working in
the forefront of pattern and colour
development.
INGEGERD RMAN,
known for her simple and
timeless glass designs,
collaborated with IKEA de-
signers Nike Karlsson and
Wiebke Braasch to create
the VIKTIGT collection.
Stripped down to bare es-
sentials, these pieces were
handmade by the design-
ers working together side
by side on the factory floor.
This made the later stages
of the production process
between designers and
local Indonesian and Polish
artisans much more simple
and organic.
24
IKEA RED DOT TILLREDA
PORTABLE WHAT IS
DESIGN AWARD DEMOCRATIC
INDUCTION
HOB

WINNERS Perfect for anyone living in

smaller spaces, or simply look- DESIGN DAY?
ing for extra cooking flexibility.
We believe in Democratic Design. Thats why we develop all And the Red Dot jury seem to On 8 June 2016, interior design and home furnishing influ-
products in the IKEA range with five dimensions in mind form, agree saying, TILLREDA port- encers, bloggers and journalists from all over the world were
function, quality, sustainability and a low price. This approach has able induction hob makes in- invited to lmhult, for the third annual Democratic Design Day.
led to several Red Dot Design Awards one of the most respected duction cooking technology Democratic Design Day is an opportunity to share our vision
international design competitions in the world. affordable to the many and design philosophy, what we are curious about and what we
without compromis-
are working on right now. We also give a sneak peek of upcom-
ing on design,
ing collections and products and we introduce some of our
functionality or
new design collaborations.
quality.

some of our latest products, phi-

DEMOCRATIC losopher Alain de Botton, start-up
DESIGN DAYS, investor Patricia Roller and design-
ZURICH 2016 er Jon Kuster took to the stage to
explain what impact design can
LISABO SERIES SLADDA have on people and the world
Recognised by the Red Dot BICYCLE AND Democratic Design lives in our beyond just making great products.
jury for rewriting the rules ACCESSORIES products, and is the backbone for
of space, as well as design, Created in partnership with all that we do in the design process Moving from theory to hands-on
sustainability and even Oskar Juhlin, Jan Puranen and throughout the value chain. It activation of what design can
time. The LISABO series and Kristian Eke of Veryday helps us deliver on the IKEA vision. do, a global design challenge
features a small wedge design studio, SLADDA But its not something we want to was launched during the event in
dowel, which cuts down bicycle was recently awar-
be a secret. We want to share it cooperation with IKEA Foundation
on assembly time by an ded the Red Dot: Best of
with peoplefrom around the world, and the Dutch organisation What
amazing 80%, and elegant the Best award in the Pro-
inspiring them to understand and Design Can Do. Over 60 designers,
design details, such as duct Design category of the
the keyhole opening Red Dot design awards. The
share our principles. design students and engineers
on the LISABO top prize reserved for participated in a workshop to kick-
desk. ground-breaking To help do just that, IKEA Retail start the competition. Read more
new designs. Switzerland organised the Dem- about the challenge on page 39.
ocratic Design Days in Zurich in
February 2016, discussing the In total, the IKEA Democratic
impact of design on everyday life. Design Day in Switzerland engaged
over 250 designers and creators
After an introduction by Marcus from all over the country, more
Engman, Design Manager, IKEA of than 20 journalists from around
Sweden, on what Democratic Design the world, and thousands more
is and how it comes through in online via live streaming.

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SERVING TODAYS
CONNECTED CUSTOMERS
Urbanisation and digital transformation are
leading to new shopping behaviours, where
people move effortlessly between physical
and digital experiences and purchases. To
grow, we need to develop the business fast-
er and in a more flexible way making sure
that we offer a customer experience in line
with peoples expectations and needs.
For us, the customer experience is real-
ly the sum of all feelings that a customer
has in all interactions with IKEA. Our home
furnishing expertise, low prices and the abil-
ity to offer relevant solutions will always be
critical success factors, but we are also tak-
ing steps to enable customers to meet and
experience IKEA in new and better ways.
We want to deliver a great experience at
every touch point, regardless of whether its
digital or physical; from the competent and
friendly service in the store or customer
support centre, to the after sales services.
Todays connected consumers seek value in
all aspects of their purchase. At a time of
growing social and environmental aware-
ness, people demand more responsibility,
transparency and dialogue. They look for
brands that they can trust and really get to
know. Brands that make valuable connec-
tions between what the company stands for
and the shopping experience they provide.
Connections that address a series of questions
on many customers minds.
IT STARTS WITH THE FOOD | DEMOCRATIC DESIGN | SERVING TODAYS CONNECTED CUSTOMERS | ABOUT IKEA CENTRES | CUSTOMER EXPERIENCE | MEETING THE MANY PEOPLE OF INDIA
Where was it made? Who made it? Who are
they as a company? Do I trust them to take
care of my needs? What do they stand for?
What are they doing for my community?
Are they taking care of the planet?
We want to build strong relationships with
customers whenever and however we meet
them, explains Carole Bates, Customer
Experience Manager, IKEA Group. To do
that, we need to understand how their expe-
riences have been with us over one journey,
or many years. We are thinking even more
about what customers really want in order
to have a better everyday life, which is the
vision of our business. Listening to their
point of view and connecting to their needs
will really help us move further.
We want to build
strong relationships
with customers
whenever and
however we meet
them
CAROLE BATES
Customer Experience Manager,
IKEA Group
26
 we want to implement it in all our
markets. To support online activ-
ities in places where it may be a
while before a store can open, we
have also introduced new formats
for planning and pick-up.

In multichannel retailing, physical

and digital touchpoints support
each other in making shopping
more convenient. In the future,
all customers should be able to
shop with us whichever way suits
them best in our stores, via the
website or on social media.

New logistics and distribution We are moving

solutions make multichannel
forward with an
possible
As our e-commerce offer expands
even greater focus
and is introduced in all markets, on innovation and
logistics and distribution become development to meet
even more important. We are customer needs in new
making major changes to reach
our customers in better ways. Part
ways
of the challenge in creating an LOTTA LYR

BECOMING A
efficient multichannel distribution Development and Expansion
network involves storing prod- Manager,
ucts closer to customers, to make IKEA Group

MULTICHANNEL RETAILER deliveries cost and time effective,

For IKEA, becoming a multi-
channel retailer means creating
a convenient experience for our
customers, no matter how or
when they choose to meet us.
With new needs and expecta-
tions, there are new things for
us to become good at. That is
why we are constantly working to
deliver consistent experiences of
our products and home furnishing
solutions in all channels.
We are on an important journey
to become a multichannel retail-
er for which we are bringing in
specialists and appropriate compe-
tencies, but also developing skills
in general across the business.
Most importantly, we are moving
forward with an even greater focus
on innovation and development to
meet customer needs in new ways,
says Lotta Lyr, Development and
Expansion Manager, IKEA Group.
Our multichannel journey focuses
on four central aspects of our
business: our stores, e-commerce,
logistics and service.
A consistent IKEA experience
in stores and online
Stores are the base on which IKEA
is built. They account for 95% of
the IKEA Group sales. Customers
visit the IKEA store for inspiration,
to get advice from IKEA co-workers,
for the shopping experience, to
eat in the restaurant, to do things
togetherwith family, to explore
our products, and to pick up
items to take home straight away.
And they will continue to do so in
the future.
On the other hand, e-commerce is
becoming increasingly important.
Our e-commerce offer is currently
available in 14 of our markets, but
which in turn enables shorter lead
times. Stores, in new and existing
formats, will play an increasing-
ly important role in distribution,
serving as a hubs for customers
to pick up, exchange and return
products theyve purchased.
Services available in all channels
With multichannel retailing in
place, any shopping that is
started at home or on a mobile
device, can be continued in store
and vice versa. Our services
in everything from delivery to
assembly will be available to cus-
tomers whenever and wherever
they wish to receive support, to
create an easy buying process.
Finally, we will increase accessi-
bility to IKEA by providing inter-
active communication through
channels like social media and live
chats. Enabling customers to meet
and experience IKEA in new and
better ways.

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COMING CLOSER TO
CUSTOMERS IN GERMANY
LBECK
BREMERHAVEN
SMART STORE SHOPPING CENTRE
The Smart Store allows LUV SHOPPING is Germanys
With new customer needs and demands leading the way, we want customers to get a faster over- first IKEA Centres shopping
to be even more accessible. By continuously expanding store and view of IKEA interior design centre. Alongside an IKEA store,
distribution networks, as well as developing new store formats ideas by showcasing the range it hosts a varied mix of family-
and services, we work to offer a seamless and more accessible on a smaller floor space. friendly small local merchants
and big national chains offer-
shopping experience for the many people in Germany.
ing everything from bread to
brogues and furniture to fudge in
53 stores under one roof.

HAMBURG BERLIN & HAMBURG

KAARST
MORE SUSTAINABLE STORE
In Germany we will pilot a brand new IKEA store
concept in the summer of 2017. The worlds first
IKEA More Sustainable Store in Kaarst will feature
a lot of natural light, many green areas for play and
sports, and a dedicated transportation concept. All
whilst working with resource-efficient approaches and
environmentally friendly technologies.
DORTMUND
PARCEL UNIT
In the newly built Dortmund Parcel Unit, we
prepare parcel-sized products for shipping. The
unit is set to provide more cost-efficient ship-
ping, cutting online order delivery costs and
shortening delivery times for customers.
RAVENSBURG
PICK-UP POINT
In Ravensburg, Germanys fist Pick-
up Point combined with a showroom
is bringing IKEA closer to the regions
customers. Now they dont have to
travel far to pick up online orders. They
can also order products from the entire
IKEA range or browse a selected product
range in the inspirational showroom.
CITY CENTER STORE
Located in a pedestrian zone
in the inner city, the Hamburg
Altona store is within customers
convenient reach. Today, more
than 80% of the visitors arrive by
public transport, and the store is
an appreciated meeting point for
the inhabitants of Altona.
MARKET CUSTOMER
DISTRIBUTION
CENTRES
Market Customer Distribution
Centres have played a key role in
our growth. They relieve the main
Customer Distribution Centre in
Dortmund by processing larger
sized online and store orders in
their respective regions. Reducing
delivery times, this is an important
step in preparing the logistics net-
work for multichannel retailing.

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NEW FORMS OF EXPANSION FOR
IKEA RETAIL UNITED KINGDOM
In FY16, IKEA Retail United Kingdom
took some significant steps for-
ward in their multichannel journey
with the launch of the new IKEA.
co.uk website, the rollout of the
markets first four Order and
Collection Points, and the first
store opening in seven years.
Following dedicated recruitment
and research in the Thames Valley,
July 2016 saw the opening of the
19th and most sustainable IKEA
store in the United Kingdom to
date. More than 40,000 people
visited the fully equipped IKEA
Reading store in its first three
days of opening. The coming years
IT STARTS WITH THE FOOD | DEMOCRATIC DESIGN | SERVING TODAYS CONNECTED CUSTOMERS | ABOUT IKEA CENTRES | CUSTOMER EXPERIENCE | MEETING THE MANY PEOPLE OF INDIA
will see new stores emerge in
Sheffield, Greenwich and Exeter.
The Order and Collection Points in
Norwich, Aberdeen, Birmingham,
and Stratford in London are pri-
marily planning studios for more
complex purchases such as kitch-
ens, wardrobes and sofas. But the
points also feature inspiring IKEA
room sets, with expert co-workers
on site to offer home furnishing
knowledge and advice.
In June, IKEA Retail United King-
dom co-workers were the first
graphical challenges. In 2015, IKEA
to browse and shop on the new
IKEA website in a soft launch that
marks the biggest milestone for
the multichannel journey in FY16.
The e-commerce platform fea-
tures even more inspiring home
furnishing, makes it even easier to
find products, and is responsive
making the IKEA online experience
consistent across all devices.
BECOMING EVEN MORE
ACCESSIBLE TO CANADIANS
For many of the 36 million people
living in Canada the worlds sec-
ond largest country by area shop-
ping for furniture can have geo-
Retail Canada started their journey
to become a multichannel retailer
and to become more accessible.
A goal that inspired the piloting
of Pick-up and Order Points in the
country.
Since December 2015, Canada
has seen the launch of six Pick-up
and Order Points. At one tenth of
the size of a traditional IKEA store,
the Pick-up and Order Points give
customers the option to pick up
their online or store purchase closer
to where they live. While there,
customers can access support
services and computer stations to
view the entire range, with the help
of knowledgeable IKEA co-workers.
They can also browse a small range
of the most popular IKEA products
available for immediate takeaway.
Pick-up and Order Points have
made us more accessible in
several markets that may not yet
support a traditional IKEA store.
In Canada, this means enabling a
more convenient shopping expe-
rience for over 800,000 visitors
so far. Showing that customers
are excited to shop at IKEA
in more accessible ways.
29

SHOPPING CENTRES WITH
STRONG CUSTOMER FOCUS
FY16 marks the first full operational year
of the newly formed shopping centre
company IKEA Centres, an IKEA Group
owned centre business with 425 million
visits in 15 countries.
The IKEA Centres business is on a journey
from being a traditional property-oriented
developer, to becoming a customer-oriented,
front-lead business. This mind-set guides us
to create great meeting places that offer a
fantastic customer experience, which gen-
erates visits and creates attractive business
conditions for IKEA and our tenants.
Bringing the shopping centre business
IT STARTS WITH THE FOOD | DEMOCRATIC DESIGN | SERVING TODAYS CONNECTED CUSTOMERS | ABOUT IKEA CENTRES | CUSTOMER EXPERIENCE | MEETING THE MANY PEOPLE OF INDIA
closer to our retail operations and the local
community creates unique possibilities to
co-create meeting places where people
come for a fun day out, to shop, dine and
enjoy themselves. We believe whats good
for our customers is also good for our ten-
ants and us.
When starting the development of a centre,
its important to really research the authenti
city of the place and the people who live
there. What makes them tick? What gets
them out of bed in the morning? What brings
them together? We constantly try to trans-
late that into our offers and services, says
Gerard Groener, Manager, IKEA Centres.
ABOUT IKEA CENTRES
IKEA Centres is an IKEA Group
company. It was created in FY15
through the merger of various
shopping centre entities.
IKEA CENTRES IN FY16
15 countries
41 shopping centres
25 retail parks
More than 3.4 million m
(excluding IKEA stores)
425 million visits
1,500 brands
6,500 shops
This is a very vital shop. Before,
lots of customers would just pass
by rather than enter the IKEA store,
because they didnt want to make
the whole trip through the store.
With SSONGSBUTIKEN, we made
IKEA more accessible to shopping
centre visitors, and now, 30% of
visitors to IKEA in RO Shopping
enter the store via our boutique
ROCIO MERINO
Shopkeeper Activities, IKEA Valladolid store
SSONGSBUTIKEN
CONCEPT STORE
In RO Shopping in Valladolid,
Spain, the IKEA store has
moved to meet shopping
centre customers in a new
way with the launch of concept
store SSONGSBUTIKEN.
In addition to a fully integrated
passage to the IKEA Market
Hall and IKEA store, the con-
cept store offers customers an
opportunity to shop for IKEA
items when perhaps they had
not even planned a visit to the
IKEA store.
The product range comes from
a mix of IKEA home furnish-
ing areas, catering to the
often impulsive nature of RO
Shopping visitors with smaller
items and seasonal variation
in line with shopping centre
activities. With an inviting
storefront and an attractive
range, SSONGSBUTIKEN
allows customers to shop at
IKEA in a different way.
7
MILLION
VISITS
to RO Shopping in
Valladolid every year.
30
PROVIDING A GREAT
CUSTOMER EXPERIENCE
IKEA Customer Support Centres are
no longer simply after-sales units. As
customers behaviours and needs are
changing, they reach out to us for more
than solving problems. They seek support for
the entire home furnishing process giving
Customer Support Centres a big role to play
in providing customers with a consistently
great IKEA experience in a multichannel
environment.

When we look into why customers are

contacting us, we see that more than 50%
are looking for support before or during
their purchase. Thats why Customer
Support Centres are so important from a
total customer experience perspective as
well as a sales perspective, says Peder
Apelgren, Customer Support Centre
Manager, IKEA Group.
To allow customers to lead the way, we con-
stantly need to develop our skills to provide
support in all steps of the home furnishing
journey, across all touchpoints. We need to
turn interactions into great customer expe-
riences and opportunities to strengthen the
IKEA brand.
Today, Customer Support Centre co-workers
meet customers over the phone, via e-mail,
webchat and social media. In line with
changing societal behaviors, social media
has now become the fastest growing con-
tact method for customers. In FY16 alone,
IKEA Group Customer Support Centres
provided personal support to 20 million
customers, with cases covering everything
from product advice and order changes to
lost teddy bears.
BUILDING CUSTOMER
RELATIONSHIPS IN POLAND
In Warsaw, IKEA Retail Poland decided to create
a Customer Support Centre not only for handling
questions and complaints, but for building the
IKEA brand one contact at a time.
We wanted to create a centre where co-workers
could change all customer issues into positive
stories worth sharing, explains Bartek Lechowski,
In FY16 alone, IKEA Group
Country Customer Experience Manager, IKEA
Customer Support Centres
Retail Poland.
provided personal support to
Every day, thousands of 20 million customers. Covering To do this, we have put great emphasis on recruit-
people contact one of the 25
topics ranging from product ment growing from 40 to almost 100 co-workers
Customer Support Centres,
where approximately 4,000
advice and order changes to lost in a year. We have developed better working
co-workers are ready to teddy bears. methods. And we have created a work environ-
answer questions in more ment that reflects our home furnishing expertise,
than 30 different languages. inspiring co-workers to meet customers confidently
every day.

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MEETING THE MANY IKEA MEETS
HYDERABAD
PEOPLE OF INDIA
We want our business to have a positive impact on
people, local economies and the environment. Under-
standing how to do this for our first store in Hyderabad
has been an important step towards launching the
We are about to expand our presence with the first IKEA retail concept in India.
ever IKEA store in India. August 2016 saw the
ground-breaking ceremony for the first IKEA store As a first step, we invited stakeholders from the Indian
in Hyderabad, which plans to open during 2017. society to a workshop on national level to explore
what it will take for IKEA to become a meaningful and
India is made up of a rich set of cultures, languages trusted brand, company and employer in India. The
and traditions across 29 states, each representing a outcome of the three-day workshop concluded focus
unique and diverse market. It was back in 1987 that areas that are now the foundation for the retail entry
IKEA started to buy products from India. Now, almost strategy to the market, such as culture and values,
30 years later, the people of India will finally have the the IKEA product offer, sustainability and how we can
chance to buy products from IKEA. build a great workplace for all.

To learn what people really need and dream about, we The very first IKEA store in India is being built in the
visit homes and spend time with families all over the new Hitec City area of Hyderabad, the capital of the
world. We talk with people. We measure things. We state of Telangana and one of the countrys largest
open closets and we look in cabinets. cities with 8 million inhabitants.

In-depth research and around 500 home visits in India To involve the local society, we held another workshop
have been essential to our preparations. We were engaging almost 100 important stakeholders and key
able to see that factors like humidity, local cleaning members of the local community, including future
practices and how our products actually will be used, potential customers. We wanted to learn more about
made up a new set of preconditions for our home the city and understand what people are passionate
furnishing solutions. The insights that we gather give about. The IKEA meets Hyderabad event confirmed
us new ideas, and enable us to design better prod- the focus areas of the entry strategy. For example,
ucts and home furnishing solutions that meet the being a good neighbour means we will continue our
needs of the people in India and beyond. efforts to enable women in the workforce and support
young talent in the local communities around the store.

We have embarked on an exciting journey and we

IKEA will influence India, but will continue our work to establish IKEA Retail in
India will also influence IKEA India with a sustainable and long-term approach. By
cooperating with the local society and with federal
PATRIK ANTONI
and state governments, we believe we are laying the
Deputy Retail Manager, IKEA Retail India
right foundation for a successful entry, not only to the
Hyderabad market, but to India overall.

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LOWER COST AND
FINDING BETTER WAYS
Milena Benzi, Customs Manager,
IKEA Italy Distribution, faced a
logistical challenge. Almost 90%
of the container flow was running
through the ports of Genoa and La
Spezia, which were operating at low
efficiency. Milena says, The cus-
toms process took nine days from
the arrival of the goods in the port
to reaching the distribution centre
in Piacenza, 150 kilometres away
leaving room for improvements.
Addressing the challenge and
wanting to find better ways around
procedures, regulations and opera-
tional software, a pilot was created
with the Italian Customs.
Through introducing new rou-
tines to deliver goods between
the ports and distribution centres,
costs were reduced by eliminating
the need for third party customs
brokers. In addition, we devel-
IT STARTS WITH THE FOOD | DEMOCRATIC DESIGN | SERVING TODAYS CONNECTED CUSTOMERS | ABOUT IKEA CENTRES | CUSTOMER EXPERIENCE | MEETING THE MANY PEOPLE OF INDIA
oped new monitoring software to
reduce the need for timely and
costly manual investigations.
As a result of these improve
ments, delivery from port to IKEA
Distribution Centre dropped from
nine days to just one, says Milena.
Customs operations from ports to
Piacenza are now totally paperless.
The new logistical system and de-
livery route is now also available to
other businesses helping to
improve Italys competitiveness ver-
sus other European trading ports.
Milena concludes, Together with
the Italian Customs authorities
and with the help of many IKEA
co-workers, we have achieved a
lot in short time. We have built
something which is valuable to our
business by working together to
find better, simpler and more cost-
efficient ways of working.
BETTER, FASTER AND MORE
TOGETHER AT IKEA INDUSTRY
In February 2016, IKEA Industry seized an
opportunity to make use of free capacity
within their wood manufacturing units.
Together with IKEA of Sweden a project
was created, called PineXpress, utilising
quick-to-market solutions to create new
products. The project was focused and
structured, running for just 10 weeks and
operating out of the Production Development
Centres of factories in Poland.
Although initially created to make use of
free capacity in the factories, after the
first meeting it became clear that the true
focus needed to be on fulfilling customers
needs. The target for the team was then
to find multi-function furniture solutions
to suit the needs of modern small-space
living. Furniture that customers would love
and that contribute to a feeling of open-
ness, instead of overcrowding a home.
Developing the ideas and prototypes be-
camea team activity, with colleagues from
different areas all working together in one
HAPPY 30TH BIRTHDAY IKEA COMPONENTS
Have you ever considered how impor-
tant that screw, plug or pin is to your
IKEA furniture? For 30 years, IKEA
Components, has been providing the
IKEA range with those vital pieces,
ensuring that your furniture works as
its designed to.
The management team of
Piacenza Distribution site:
Claudia Dicketmuller, Luigi IKEA Components secures, develops
Manzoli, Milena Benzi and and challenges areas of compo-
Glenda Taina at the day of the
nents and raw materials essential to
inauguration of the project.
room. As soon as an idea was presented by
the designers, the craftsmen could quickly
bring it to life in a prototype for the de-
signers to review. This closeness between
ideation and prototyping, seeing ideas
immediately come to life through dialogue
and experimenting, gave great inspiration
to everyone involved.
More than 150 prototypes were created,
and of these, 58 were selected for further
product development. These products
include adaptations of the HEMNES family,
identifying and filling gaps in the existing
range, as well as completely new products
called Modern Basic and Modern Edge.
The PineXpress project breathed new life
into the product development process
for pine furniture. Not only did it create
a number of great new products, it also
gave learnings and insights around the
concept of togetherness between different
parts of IKEA businesses, creating a high-
ly efficient working process for the future.
the IKEA range. This means small,
yet precise steps to improve life,
comfort and technological accessi-
bility for everyone. Whether it is a
more sustainable cardboard in your
flat-package; a wireless charger for
your phone; or a new component
solution cutting furniture assembly
time in half IKEA Components con-
stantly strives to make things better.
33
PEOPLE
AND PLANET
POSITIVE
We want our business to have a positive impact on
the world from the communities where materials are
sourced, to the way our products enable customers
to live a more sustainable life at home. And we go
all-in on the things that make a difference, like going Want to know more? See the full IKEA Group
100% for renewable energy or sourcing all of our Sustainability Report: ikea.com/ikeagroup16
cotton and wood from more sustainable sources.

LED AND SOLAR | PHASING OUT EPS | COTTON AND WOOD FROM MORE SUSTAINABLE SOURCES | SOCIAL ENTREPRENEURS 34
IKEA RETAIL FINLAND INSPIRE
CUSTOMERS TO FIND ENLIGHTENMENT
To inspire more people to live
more sustainably, IKEA Retail
Finland challenged local students
in design, handicrafts and art to
create art using lighting from the
IKEA LED range under the project
name Enlightenment. Five design
schools and universities took part
in the events, creating installa-
tions in five IKEA stores and a
Pick-up and Order Point in Finland.
Kirsi Gotthardt, Country Communi-
cations Manager, IKEA Retail
Finland, explains, We wanted to
work together with Finlands up-
and-coming designers to encourage
LED AND SOLAR | PHASING OUT EPS | COTTON AND WOOD FROM MORE SUSTAINABLE SOURCES | SOCIAL ENTREPRENEURS
people to think about the impact
their daily activities have on the
environment. One installation at
the IKEA Vantaa store, titled LUX,
aimed to encourage customers to
make sustainable choices, such as
changing to energy efficient LED
bulbs, whilst also celebrating the
beauty and importance of light in
their everyday life.
IKEA Enlightenment
was a pleasant cooper-
ation for our students,
because sustainability
and energy efficiency
are stated also in Aalto
Universitys values. We
hope that the installa-
tions raised emotions
and awareness
PENTTI KAREOJA
Professor Aalto University
SWITCHING
TO LED
Since September 2015,
our entire lighting range
consists of energy-efficient
LED. It is one of the ways
we are going all-in to
tackle climate change.
LED bulbs last up to 20
years and use up to 85%
less energy than incan-
descent bulbs, saving
customers money on their
electricity bills and enabling
them to live more sustain-
able lives at home by using
less energy. In FY16, we
sold 79 million LED bulbs.
If each of the bulbs sold
replaced an incandescent
bulb, they could save
enough energy to power
almost 650,000 households
for a year. Our ambition
is to sell 500 million LED
bulbs by 2020.
SOLAR ENERGY THE IKEA WAY
offering home solar to our customers
We know that people want to live
more sustainably at home, cutting
their household bills and gener-
ating clean energy. But sustain-
ability should not be a luxury for
the few, which is why we want to
make solar energy affordable to
everyone, by offering home solar
to our customers the IKEA way.
Solar is the most democratic
form of energy source - eve-
ryone can produce their own
energy. We at IKEA Retail
Switzerland are proud to give
the many people access to the
future of renewable energy
LORENZ ISLER
Sustainability Manager,
IKEA Retail Switzerland
730,000
In IKEA Group, we have
installed 730,000 solar panels
on our own buildings in line
with our goal to produce as
much renewable energy as we
consume by 2020.
After piloting home solar in the
Netherlands, Switzerland and
the UK, we continue to roll out
our home solar offer to more
countries during FY16. Using our
knowledge about life at home
and retail, and combining it with
the technical expertise of select-
ed solar partners, we are able to
provide customers with a simple,
affordable and reliable offer.
We believe solar energy is un-
doubtedly the future. It gives
everyone the opportunity to control
their energy needs, to reduce costs
and help tackle climate change. Im
very proud and excited to be a part
of a journey to make solar energy
mainstream around the world,
says Alex Castro, Residential Solar
Business Leader, IKEA Group.
35
PHASING OUT
POLYSTYRENE PACKAGING
IN IKEA FLAT PACKS
IKEA has phased out packaging
solutions using expanded poly-
styrene (EPS) foam and replaced
them with recyclable and more
sustainable alternatives.
Why should we fill the air in our
flat packs with something that
is more dangerous than the air
itself?, says Peter S Larsson,
Packaging Sustainability Leader,
IKEA of Sweden. We kept asking
ourselves this question, and decid-
ed to develop recyclable alterna-
tives that are as good or better. It
took four years, but now we can
say we made it!, he continues.
Polystyrene packaging is a cheap,
durable and easy-to-use pack-
aging material, widely used all
around the world. But it is also a
fossil based product which cant be
recycled at industrial scale, and in
some regions ends up in landfills.
Still, there was a big resistance
towards phasing out polystyrene
packaging, both internally and
with many suppliers. Why should
we change something that is
good, cheap and something that
weve used for ages?, was a com-
mon way of thinking.
LED AND SOLAR | PHASING OUT EPS | COTTON AND WOOD FROM MORE SUSTAINABLE SOURCES | SOCIAL ENTREPRENEURS
Intensive development work took
place. It took four years but
the result will probably change
packaging solutions in the home
furnishing industry for good.
Together with many co-workers
and suppliers we have managed
to phase out and replace poly BETTER BATTERIES
styrene packaging with recyclable
BRING BETTER BUSINESS
and more sustainable fibre-based
materials. It can be recycled many Continuing our journey towards a more sus-
times and works great together tainable IKEA, IKEA GreenTech and Alelion
with the recycling systems used by Energy Systems have developed a lithium-ion
most countries today, says Peter. battery to power new forklifts in IKEA stores.
This alternative to the traditional lead-acid
The change also means that IKEA battery helps make IKEA warehouse opera-
reduces the use of expanded poly- tions more sustainable and more efficient.
styrene by 8,000 tonnes per year.
This equals 7,400 trucks filled
IKEA GreenTech AB is a corporate venture capital
with polystyrene foam or more company owned by IKEA Group. They are making equity
than half the volume of the Empire investments in green technology companies to improve
the sustainability of the IKEA business activities.
State Building.
The decision to change filling mate-
rial in IKEA flat packs is valid for all The new battery is over 30%
packaging except for appliances.
more energy-efficient and
We are simply too small in this
also reduces CO emissions
segment to be able to affect the
JENS HAGBERG
global industry. But we are working Category Manager, Material Handling and Storage,
on a more sustainable solution even Indirect Material and Services, IKEA Group
within this field, concludes Peter.
36

COTTON FROM MORE
SUSTAINABLE SOURCES
As one of the biggest users of cotton globally,
we have a huge opportunity to support cot-
ton farmers and improve the way we work
with cotton across our entire value chain. In
September 2015, we reached the goal of
sourcing 100% of the cotton used for our
products from more sustainable sources.
Since then, we have succeeded in maintain-
ing this level.
When grown conventionally, cotton
farming uses large amounts of chemicals
and water. This practice often leads to sig-
nificant health risks to famers, soil erosion
and water scarcity. Most cotton is grown on
small farms in developing countries, and
many farmers struggle to make a profit.
But it doesnt have to be this way.
In 2005, we began taking steps to trans-
form the way cotton is produced and gave
ourselves the ambitious goal to source all
the cotton used in our products from more
sustainable sources. Along with the WWF
and other partners, we helped set up the
Better Cotton Initiative (BCI) which aims to
make global cotton production better for
the people who produce it, better for the
environment it grows in and better for the
industrys future.
Together with partners like BCI and WWF,
we are working in cotton-producing coun-
tries to provide hands-on training and
field schools so far weve enabled more
LED AND SOLAR | PHASING OUT EPS | COTTON AND WOOD FROM MORE SUSTAINABLE SOURCES | SOCIAL ENTREPRENEURS
than 110,000 farmers to learn more about
sustainable farming methods, says Pramod
Singh, IKEA Cotton Leader, IKEA of Sweden.
This initiative has allowed farmers to cut
costs, increase their profits and improve
their working conditions. As a result, they
can afford a better quality of life for their fam-
ilies, including schooling for their children.
But it is just one part of a much longer jour-
ney. Our next step is to keep on improving
the standard for cotton from more sustain-
able sources, with special focus on water
efficiency and biodiversity. We are commit-
ted to creating positive change throughout
the entire cotton industry, making cotton
from more sustainable sources available for
the many people.
WHAT IS COTTON FROM
MORE SUSTAINABLE SOURCES?
Cotton from more sustainable sources is grown
using sustainable farming practices that promote
efficient use of fertilisers, pesticides and water,
improve working conditions and earnings for farm-
ers, and benefit ecosystem health and biodiversity
conservation. It includes cotton that is: grown to
the Better Cotton Initiative Standard, grown by
farmers working towards the Better Cotton Initiative
Standard, and recycled cotton. It also includes more
sustainable cotton from the USA (such as the e3
Cotton Program).
IWAY THE IKEA
SUPPLIER CODE
OF CONDUCT
We believe that everyone deserves the right
to prosper, regardless of their background
and situation. Across our business, from our
co-workers to the millions of people who work
in our extended supply chain, we can make a
difference to peoples lives around the world.
The IKEA Way (IWAY) on purchasing prod-
ucts, materials and services is our supplier
code of conduct. It sets our minimum re-
quirements for suppliers, covering environ-
ment, social and working conditions, and is
a pre-condition for doing business with us.
IWAY helps us develop long-term relation-
ships with suppliers so that we can grow
together with shared values and understand-
ing. Our IWAY developers work with suppli-
ers to support them in implementing IWAY
and, more importantly, to bring positive
impacts to the many people involved in the
IKEA supply chain.
61% WOOD FROM MORE
SUSTAINABLE SOURCES
As a major user of wood and paper for
our products and packaging, we have
a responsibility to protect the worlds
forests. This is why we work with others,
like the WWF, to increase the area of
global forests that are managed sustain-
ably. By 2020, we aim to source all wood,
paper and cardboard from more sustaina-
ble sources, which we currently define as
Want to know more? See the full IKEA Group recycled or certified to the standards of
Sustainability Report: ikea.com/ikeagroup16 the Forest Stewardship Council (FSC).
In FY16, 61% of our wood was from more
sustainable sources.
37
PARTNERING FOR CHANGE
The HEMTRAKT Collection, in partnership
with Rangsutra and Industree Producer
Transform, was the fifth limited collection
co-created with social entrepreneurs in
India. It featured a range of woven bas-
kets made from sustainable banana fibre,
and beautiful hand embroidered blue floral
patterned fabrics inspired by old fabrics,
wallpapers and flowers in India.
By developing partnerships with social
enterprises like Rangsutra, we get the
chance to work with skilled artisans
whilst supporting entrepreneurs, which
contribute towards social change and
sustainable livelihoods. Sumita Ghose,
founder and CEO of Rangsutra, explains,
Common problems for women in rural
India include poor access to education,
health care, clean drinking water and the
lack of ability to support themselves. If
women get the chance to work regularly,
they have more money for health care,
a chance to get out of the home and a
greater influence on family decisions.
We were inspired by old fabrics, wallpapers and flowers
in India. The lovely blue floral pattern together with the
natural fibres is a great mix. The feeling would be dreamy
and relaxing, like a rural garden
Range Manager, IKEA of Sweden
LED AND SOLAR | PHASING OUT EPS | COTTON AND WOOD FROM MORE SUSTAINABLE SOURCES | SOCIAL ENTREPRENEURS
Dr. Dipti, Program Manager at Rangsutra
and responsible for the handicrafts made
for IKEA Group in Uttar Pradesh, recalls
how things used to be for her when
she was younger. I was the eldest of
two sisters and a brother. We girls were
considered a burden to society. Life for us
was a challenge. But I have always been
a fighter. If someone said that I couldnt
ride a bike, then I did it. If someone said
Science is not a subject for girls, then
I had to take it. During my first year of
postgraduate studies, I got married and
we moved to Varanasi.
Dipti felt suppressed in her new home.
Lacking identity as she struggled to
accept the restriction of freedom she
experienced as a woman. I felt that I
always had to fight for my equality in
society. I didnt have freedom, or choices.
I felt oppressed, continuously. Then one
day I made the decision, and said no! I
have one life. I can either live my life by
others choices or by my choices. With change the world for the better.
KARIN GUSTAVSSON
the support of her family, she focused on
her education and went on to successfully
attain a PhD in Physics. My mother was
a pushing force in my life. She had one
wish: that her girls receive an education.
Dedicating her life to the economic
empowerment of women, Dipti founded the
Varanasi Weavers Foundation. I had to
do something for the women, something
for the girls who were oppressed. After
some time, Sumita heard about Diptis
work, and invited her to Rangsutra to work
with the partnership. I am very keen on
strengthening women and the partner-
ship was all about doing that. By helping
women challenge cultural norms and find
their own profession and voice, she now
feels nothing but hope for the future.
The work with Rangsutra is just one of
our partnership initiatives, and today we
engage with more than 2,000 artisans in
Europe, USA and Asia, working together to
RANGSUTRA &
INDUSTREE PT
Artisans at Rangsutra specialise in
traditional Indian embroidery, textile
and grass weaving and come from
rural areas in Uttar Pradesh and
Rajasthan. 95% of the artisans at
Rangsutra are women, many of which
are shareholders in the company and
participate in design and production
decisions.
IKEA SOCIAL
Industree Producer Transform pro-
duction centres are artisan-owned
self-help groups located primarily
in southern India in the states of
Karnataka and Tamil Nadu. The
ENTREPRENEURS
artisans here specialise in hand-wo-
ven natural fibres. They are voting
INITIATIVE
members of self-help groups and de-
cide together how much money they
will collectively save each month and The IKEA Social Entrepreneurs Initiative,
what the money will be used for. which was founded in 2012, allows us to
establish partnerships with social entrepre-
neurs like Rangsutra who share our values
and vision to make everyday life better
in their communities. We want to support
positive economic and social developments
across the world to create long-term, sus-
tainable change.
We are currently working with social entrepre-
neurs in India, Thailand, Sweden, Denmark,
Indonesia and the US, and are actively look-
ing for new partners around the world.
38
IKEA Foundation IKEA Foundation
Children are the most important people in the world. They

DESIGNING FOR
have the right to learn, play and grow. IKEA Foundation,
the philanthropic arm of Stichting Ingka Foundation (the

A GOOD CAUSE
owner of the IKEA Group), supports projects in some of
the worlds poorest and most vulnerable communities im-
proving opportunities for children and their families. Along
with its partners around the world, the IKEA Foundation
focuses on four important areas of a childs life: a place to
call home, a healthy start in life, a quality education, and In February 2016, at the Democratic EUR 10,000 each, along with expert
a sustainable family income. Design Day in Zurich, IKEA Foundation, support to convert ideas into feasible
the philanthropic arm of Stichting Ingka plans and working prototypes. The final
Foundation (the owner of the IKEA winners were announced in July 2016,
Group), teamed up with the UNHCR with the jury consisting of internation-
and the Dutch organisation, What ally renowned design professionals,
Design Can Do (WDCD), to launch a including Marcus Engman, Design Man-
global design challenge, showcasing ager, IKEA of Sweden.
design as a catalyst for change. The
competition named What Design Can
Do Refugee Challenge, called on de-
signers and creative thinkers to submit FINALISTS
game-changing yet feasible ideas to PROJECT IDEAS

A BETTER WORLD help refugees integrate in urban areas. The finalists were announced by the
IKEA Foundation at the WDCD Live

WITH GOOD CAUSE More than 600 teams from 69 countries

entered their concepts to help improve
event in Amsterdam in July 2016.
Their project ideas were:

CAMPAIGNS the quality of life for refugee children

IKEA Foundations mission is to create
substantial and lasting change by funding
holistic, long-term programmes in some of
the worlds poorest communities that address
childrens fundamental needs: home, health,
education and a sustainable family income,
while helping communities fight and cope
with climate change.
In FY16, just like in previous years, global
campaigns for a good cause, Brighter Lives
for Refugees and Soft Toys for Education
continued to engage customers and
co-workers to improve childrens lives.
Brighter Lives for Refugees
Through the Brighter Lives for Refugees
campaign, IKEA Foundation donated EUR 30.8
million to improve access to lighting, renew-
able energy and primary education for around
380,000 people in refugee camps across Asia,
Africa and the Middle East.
Soft Toys for Education
Since 2003, IKEA Foundation donated
EUR 88 million to Save the Children and
UNICEF, supporting 99 educational projects
for 12 million children across 46 countries
in Africa, Asia and Europe.
and their families. Eight of those teams
were made up of IKEA co-workers. The
entries covered solutions to many dif-
ferent needs, from connecting people
through digital social networks and
access to knowledge and work, to
practical solutions such as bicycle-
powered phone chargers and foldaway
showers. Some of the most innovative
ideas were presented to the world
media and other influencers at the
Democratic Design Day in June, held
in lmhult, Sweden.
From the 600 entries, five winning ideas
were selected and received funding of
Makers Unite - A co-creation lab for
creatives and refugees
The Welcome Card - Which gives
refugees access to social amenities
Eat & Meet - A network bus
transformed into a kitchen
AGRIshelter - Self-sufficient
sustainable shelters
Reframe Refugees - A photo
agency that enables refugees to tell
their own stories.
Read more about the finalists
and their ideas at:
What design can do

39
FINANCE
Growth and profitability give us freedom to
choose our own way and resources to grow
and improve our business. Therefore, we
have a strong focus on continuous growth,
as well as on efficiency in our operations.
We will continue to invest long-term,
focusing on meeting customer needs and
making IKEA Group more accessible to
more people in the future.

OUR FINANCIAL YEAR 2016 | TAXES | INVESTMENTS | TOTAL REVENUE FY07FY16 | CONSOLIDATED INCOME STATEMENT | CONSOLIDATED BALANCE SHEET 40
OUR FINANCIAL YEAR 2016
Thanks to solid sales growth,
EUR 4.2 billion net profit and an
increasing focus on multichannel
retailing, FY16 was another good
year. We saw sales growth in
comparable stores, as well as
new stores and e-commerce. We
also have our focus on integrating
physical and digital commerce
to enable customers to shop and
interact with us in ways that suit
their needs.
Our markets
In FY16, our sales grew in 27 out
of 28 markets with China remain-
ing one of the fastest growing
countries for IKEA Group together
with Canada, Poland and Australia.
The five largest retail markets
based on sales value were Germany,
USA, France, United Kingdom and
Sweden. We opened 12 new stores
and 19 Pick-up and Order Points
during FY16, and further developed
our multichannel distribution net-
work to increase accessibility for
customers. We welcomed 783 million
visits to our stores, 2.1 billion
visits to IKEA.com and 425 million
visits to our shopping centres. In
addition, we continued working on
opening our first stores in India
and Serbia.
Our performance
In FY16, total sales for IKEA Group
amounted to EUR 34.2 billion.
Total sales of goods translated
OUR FINANCIAL YEAR 2016 | TAXES | INVESTMENTS | TOTAL REVENUE FY07FY16 | CONSOLIDATED INCOME STATEMENT | CONSOLIDATED BALANCE SHEET
into Euro increased by 7.1% and
adjusted for currency impact,
sales increased by 7.9%. Sales in
comparable stores grew by 4.8%
compared to FY15. In FY16, we
offered e-commerce in 14 out of
28 markets and related sales grew
by 29% to EUR 1.4 billion. We plan
to roll out e-commerce to all our
markets in the coming years.
Together with the rental income of
EUR 0.9 billion from IKEA Centres,
our total revenue amounted to
EUR 35.1 billion, an increase of
7.4% compared to FY15. The
rental income increased by 18.0%
compared to FY15.
Gross margin ended on 46.1%, an
increase due to different sales mix
and strong performance in the cost
out agenda. Operating expenses
as a percentage of revenues
increased to 33.2%. The acqui-
sitions of IKEA Centres in the
course of FY15 and increased ex-
penses from business development
contributed to the higher cost
percentage in FY16.
Our financial net result of EUR 0.9
billion was significantly above last
years. During the year, cash and
securities increased by EUR 6.5
billion to EUR 23.2 billion with a
large contribution from the sale of
shares in our product development,
supply chain and production com-
TOP RETAIL SELLING COUNTRIES SALES PER REGION
69%
panies to Inter IKEA Group. The
estimated cash consideration for
the shares is EUR 5.2 billion.
Net profit was EUR 4.2 billion, an 18%
increase of 19.6% compared to
9%
FY15. Total assets increased during 14% 14% 8% 6% 5%
4%
the year from EUR 50.0 billion to
EUR 54.0 billion while we further GERMANY USA FRANCE UNITED SWEDEN EUROPE AMERICAS ASIA & AUSTRALIA RUSSIA
KINGDOM
increased our solvency with 38.9
billion of equity at year-end. Our
strong financial position enables
us to continue investments in
co-workers, our stores, digital
technology, the distribution net-
work, as well as shopping centres
and renewable energy.
In FY16 we did not pay a dividend
to our owner Stichting Ingka
Foundation out of the result from
FY15. However, a dividend of EUR
840 million will be paid out in FY17
out of the result from FY16. CURRENCY IMPACT
The IKEA Group is based in the
Netherlands and therefore reports its
financial results in Euro (). This means
that all figures in local currencies from the
countries in which we operate are trans-
lated into Euro and then accumulated.
Since currencies fluctuate, companies will
always face currency effects when doing
these translations. In order to show the
underlying trend when adjusting for this
effect, the IKEA Group also communicates
the currency-adjusted development. For
FY16, the currency-adjusted sales growth
was 7.9%, while the straight conversion into
Euros shows a sales increase of 7.1%.
41
TAXES
We have a strong commitment to experience and a positive impact suppliers which in turn generate
manage our operations in a re- on people and the planet. Over taxable incomes. We continuously
sponsible way and to contribute to the years, IKEA Group has had a invest throughout our business in
the societies where we operate. good development and created stores, shopping centres, distribu-
tens of thousands of jobs direct- tion, renewable energy and lower
We want to create long-term ly in our stores and warehouses, prices to customers.
value through growth, customer and indirectly at our external
We pay our taxes in compliance
with national and international tax
rules and regulations in a respon-
FY12FY16 TAX sible and sustainable way. We
Over the last five years (FY12FY16), corporate income tax and enter into and maintain long-term
other taxes amounted to approximately EUR 7.7 billion. relationships with our stakehold-
ers with regard to tax, based on
Corporate income Tax Other Taxes and Duties trust and transparency. We do
our utmost to ensure that our tax
statements are true, timely and
transparent.
(in billions of Euros)
In FY16, IKEA Group corporate
income tax was EUR 1.2 billion
2 globally, which equals an effec-
tive corporate income tax rate of
21.6% (18.9% in FY15). In FY16,
1.5 our total tax bill, including other
taxes and duties amounted to
approximately EUR 1.9 billion.
1 Over the last five years (FY12
FY16), corporate income tax and
other taxes amounted to approxi-
0.5 mately EUR 7.7 billion.
In addition, we collected substantial
0 tax amounts on behalf of govern-
FY12 FY13 FY14 FY15 FY16 ments, such as VAT and employee
taxes.
OUR FINANCIAL YEAR 2016 | TAXES | INVESTMENTS | TOTAL REVENUE FY07FY16 | CONSOLIDATED INCOME STATEMENT | CONSOLIDATED BALANCE SHEET
INVESTMENTS
Continued growth and long-term In FY16, we invested EUR 3.2
profitability give us funds to invest billion mainly in stores, shopping
and to have a positive impact, both centres, distribution centres and
through our core business and renewable energy, to better serve
through our financial investments. our customers.
FINANCIAL
ASSET MANAGEMENT
Financial asset management at IKEA Group includes activities within treasury
assets, venture capital and investments to further support our business develop-
ment and sustainability direction. During FY16, we have continued to invest in the
growth of sustainable energy and resource independence.
RENEWABLE ENERGY RESOURCE INDEPENDENCE
INVESTMENTS INVESTMENTS
In FY16, we continued our renewable Our investments in resource independ-
energy investments. By year-end FY16, ence go beyond renewable energy. At
we have committed to own and oper- year-end FY16 we own 74,700 hectares
ate 327 wind turbines around the world of forest in Romania and the Baltics
and have invested in 730,000 solar states and we achieved FSC certifica-
panels on our buildings worldwide. In tion in Romania within one year after
FY16, our 165 MW wind farm project the
in Cameron Texas, as well as two wind forest acquisition. The long term
farm projects in Poland totaling 87 MW sustainable annual growth from our
came into operations, bringing the in- own forest operations is approximately
stalled wind farm capacity to 735 MW. 500,000 m of wood logs, the equiva-
The total production capacity of our lent of 20,000 truckloads.
renewable investment portfolio now
exceeds the consumption of 500,000
average European households.
42
 CONSOLIDATED
INCOME STATEMENT
TOTAL REVENUE FY07FY16 1 September 2015 31 August 2016

(in millions of Euros) FY16 FY15

(in billions of Euros) Revenue 35,074 32,658

Cost of sales 18,918 18,221
Gross profit 16,156 14,437
Operating cost 11,657 10,388
Operating income 4,499 4,049
40 Total financial income and expense 869 299
35.1
Income before minority 5,368 4,348
32.7
interests and taxes
29.3
28.5
30 27.6 Tax 1,158 822
25.2
23.5 Income before minority interests 4,210 3,526

21.5 21.8 Minority interests 10 14

20.0
20 Net income 4,200 3,512

The included abbreviated financial statements are an abridged version of the conso-
10
lidated financial statement of Ingka Holding B.V. as included in the Annual Report for
financial year 2016.
An unqualified auditors report dated 29 November 2016 was issued on these financial
statements. Ingka Holdings Annual Report for 2016 will be available through the
Dutch Chamber of Commerce. Ingka Holdings consolidated financial statements,
0
from which these abbreviated financial statements have been derived, have been
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 prepared in accordance with Part 9 of Book 2 of the Dutch Civil Code.
The IKEA Group total revenue includes sales of goods and rental and service income
from our shopping centres.

OUR FINANCIAL YEAR 2016 | TAXES | INVESTMENTS | TOTAL REVENUE FY07FY16 | CONSOLIDATED INCOME STATEMENT | CONSOLIDATED BALANCE SHEET 43
CONSOLIDATED BALANCE SHEET CONSOLIDATED BALANCE SHEET
ASSETS EQUITY AND LIABILITIES

(in millions of Euros) FY16 FY15 (in millions of Euros) FY16 FY15
Property, plant and equipment 23,033 22,840 Group equity 38,907 34,896
Other fixed assets 1,955 2,515 Long-term liabilities 1,385 2,061
Total fixed assets 24,988 25,355 Other non-current liabilities 1,908 1,971
Inventory 1,713 5,498 Total non-current liabilities 3,293 4,032
Receivables 4,115 2,500 Short-term liabilities 5,126 4,880
Cash and securities 23,151 16,659 Other payables 6,641 6,204
Total current assets 28,979 24,657 Total current liabilities 11,767 11,084
Total assets 53,967 50,012 Total equity and liabilities 53,967 50,012

FY16 TOTAL ASSETS FY06 TOTAL ASSETS FY16 TOTAL EQUITY AND LIABILITIES FY06 TOTAL EQUITY AND LIABILITIES
EUR 53,967 million EUR 25,785 million EUR 53,967 million EUR 25,785 million
3% 2%
INVENTORY
8% 3% 4% OTHER NON-CURRENT LIABILITIES
4% RECEIVABLES 10%
LONG-TERM LIABILITIES OTHER NON-CURRENT LIABILITIES
OTHER FIXED ASSETS 6% INVENTORY 15%
OTHER FIXED ASSETS 9% SHORT-TERM LIABILITIES
8% SHORT-TERM LIABILITIES
RECEIVABLES
21%
LONG-TERM LIABILITIES

12%
12% OTHER
OTHER PAYABLES
PAYABLES

42%
PROPERTY,
43% 40% 36% 50%
PLANT AND
CASH AND PROPERTY, CASH AND 72% GROUP
EQUIPMENT SECURITIES GROUP
SECURITIES PLANT AND EQUITY
EQUIPMENT EQUITY

OUR FINANCIAL YEAR 2016 | TAXES | INVESTMENTS | TOTAL REVENUE FY07FY16 | CONSOLIDATED INCOME STATEMENT | CONSOLIDATED BALANCE SHEET 44
GOVERNANCE,
MANAGEMENT AND
SUPERVISORY BOARD
Entering FY17, IKEA Group has a new global organisation
in place and a clearer role that allows a stronger focus on
the customer, growth and the ability to stay ahead of a
rapid changing retail market. By using our resources and
capabilities in new ways, we can make IKEA more accessible
to more customers and deliver to our vision of creating a
better everyday life for the many people.

IKEA GROUP GOING FORWARD | GROWING IKEA TOGETHER 2020+ | COMPANY STRUCTURE | RETAIL AND DISTRIBUTION | GROUP MANAGEMENT & SUPERVISORY BOARD 45
AN IMPROVED IKEA FRANCHISE SYSTEM FOR LONG-TERM GROWTH:
PRODUCT DEVELOPMENT, SUPPLY
CHAIN AND PRODUCTION
COMPANIES TO INTER IKEA GROUP
One brand many companies
IKEA is one brand used by many compa-
nies under a franchise system established
in the 1980s. Inter IKEA Group is the
franchisor and owner of the IKEA brand
and concept. IKEA Group is the largest
franchisee with approximately 90% of IKEA
sales and 340 stores in 28 countries. IKEA
Group and Inter IKEA Group are two inde-
pendent groups of companies with sep-
arate management and owners. In total,
there are 389 IKEA stores in 48 countries
worldwide operated by 13 franchisees
under franchise agreements.
An improved franchise system with
clearer roles
IKEA Group and Inter IKEA Group have al-
ways been in dialogue about how to develop
IKEA into the future. Historically, the prod-
uct development and supply chain compa-
nies have been owned and operated
by IKEA Group under a non-exclusive as-
signment from Inter IKEA Group. As of 31
August 2016, Inter IKEA Group became the
new owner of these companies through sale
of shares. The production companies were
also included in the transaction as production
IKEA GROUP GOING FORWARD | GROWING IKEA TOGETHER 2020+ | COMPANY STRUCTURE | RETAIL AND DISTRIBUTION | GROUP MANAGEMENT & SUPERVISORY BOARD
IKEA GROUP
GOING FORWARD
is closely linked to both product develop- As we look to the future, we will be able to focus even
ment and the supply chain. more on our customers and accelerate the process to roll
out multichannel in all our markets.
The change of ownership simplifies and
improves the IKEA franchise system, ena- During FY16, we took the first steps in the work where
bling the two groups of companies to focus we defined how we lead, work and organise going forward.
on their respective core businesses and Our direction ahead is clear: The strategic focus is on home
creating better conditions for long-term furnishing multichannel retailing. This means that we will
growth. This move follows the logic behind create an even better customer experience going forward
the franchise system that was once drawn and that everyone will have an even stronger focus on the
up. With the new set-up IKEA Group will customer and on our ability to grow, says Peter.
have an even stronger focus on the cus-
tomer and on development of multichannel Our opportunities are great. Many people across the
retailing and distribution. world dont yet have access to IKEA. In most of our
markets we are still relatively small, and we have good
Peter Agnefjll, President and CEO, IKEA opportunities to continue to grow in the countries where
Group, explains, In a rapidly changing we operate. With more than 783 million visits to our
retail landscape this is an exciting agenda stores, 2.1 billion visits to IKEA.com and 425 million visits
full of opportunities that requires all our to our shopping centres, we are well positioned and still
attention. IKEA Group and Inter IKEA just at the beginning of our journey, Peter continues.
Group will continue to be strategic part-
ners in development and innovation - we However, if we merely continue as we are today, we
contribute to the same one IKEA brand will not keep up with the changing expectations of our
and share the same vision and roots. customers. Their expectations are constantly rising. We
And even though we are two independ- need to give every customer a fantastic experience
ent groups of companies, with different online, in the stores and when they use our products
management and owners, we depend at home, says Peter. Our new direction will truly put
on each others success. our customers centre stage.
46
GROWING IKEA
TOGETHER 2020+
In order to better reflect the new
role and strategic priorities for
IKEA Group, we have updated
our long-term direction. A few
elements are new, now when we
have started our journey towards
becoming the worlds leading mul-
tichannel home furnishing retailer.
But our starting point remains the
same: We are here to create a
better everyday life for the many
IKEA GROUP GOING FORWARD | GROWING IKEA TOGETHER 2020+ | COMPANY STRUCTURE | RETAIL AND DISTRIBUTION | GROUP MANAGEMENT & SUPERVISORY BOARD
people. Peter Agnefjll says, We
have a positive view on the future!
But growth will not come by itself.
By working together, we can
achieve a lot and develop IKEA
further customer by customer,
and market by market.
Growing IKEA Together 2020+ is
the IKEA Group direction with a
holistic growth agenda, reflecting
our role and strategic priorities.
The direction is built on the same
strong foundation as earlier direc-
tions and is reinforced with an
even stronger customer focus; the
positioning of IKEA as a unique,
meaningful and trusted brand,
company and employer, and the
transformation into a multichannel
retailer on all markets.
NEW ORGANISATIONAL STRUCTURE
In order to better support our customer focused Centres, and together work to support expansion and
multichannel strategy, our management structure customer experience in all touch points. The restruc-
has been updated. This change enables us to turing also means that we simplified our decision-
strengthen our focus on what is really at the making structure by eliminating one management
heart of our business our customers. layer, in order to avoid double decision-making.
With the changes now in place and effective as of
Going forward, we will deliver world-class customer 1 September 2016, the new structure better supports
experience through improved cooperation between customer-centric growth and makes IKEA accessible
our core areas Retail, Customer fulfilment and to many more people.
THE FUTURE
BRINGS NEW
OPPORTUNITIES
Change brings us new opportunities. We have a
fantastic vision that inspires and guides us. Peoples
needs and dreams of a better everyday life are at
the heart of everything we do, and our new structure
better enables us to deliver on that vision. By under
standing and responding to changes in society and in
peoples lives, we will discover new opportunities to
meet the needs of the future. It is a transformational
change where the IKEA stores will continue to be at
the heart of our operations and will continue to play a
fundamental role as our most important touch point
in a multichannel IKEA stimulating interest in home
furnishing and connecting with people.
Stores are planned to be opened in new countries such
as India and Serbia, with rapid expansion plans. As
our e-commerce solutions expand into all our markets,
logistics and distribution become even more important
to help meet customers in even more efficient ways.
Our journey to become the worlds leading multi-
channel home furnishing retailer has just begun.
Most things still remain to be done. And everyone
is needed. What a glorious future!
47
OWNERSHIP STRUCTURE
The IKEA Group of companies
(Ingka Holding B.V. and its controlled
entities) has an ownership structure
that ensures independence and a
long-term approach. Stichting Ingka
Foundation in the Netherlands is our
owner, and its funds can be used in
only two ways: it can be reinvested
in the IKEA Group or donated for
charitable purposes through the
Stichting IKEA Foundation.
IKEA GROUP OF COMPANIES
Ingka Holding B.V. is the parent
company of the IKEA Group, lo-
cated in Leiden, the Netherlands.
As per 31 August 2016, the
Supervisory Board consists of:
Lars-Johan Jarnheimer (Chairman),
Jon Abrahamsson Ring*, Stina
*New member of the Supervisory Board from 29 November 2016
The IKEA Group
(Ingka Holding B.V. and its controlled entities)
CENTRES RETAIL
IKEA GROUP GOING FORWARD | GROWING IKEA TOGETHER 2020+ | COMPANY STRUCTURE | RETAIL AND DISTRIBUTION | GROUP MANAGEMENT & SUPERVISORY BOARD
Charity
Stichting IKEA Foundation
Stichting Ingka Foundation
Owner of the IKEA Group Management of financial assets
Stichting IMAS Foundation
The IKEA Group
(Ingka Holding B.V. and its controlled entities)
SALE OF PRODUCT
DEVELOPMENT,
SUPPLY CHAIN
AND PRODUCTION
Bergfors, Tore Bertilsson, Luisa IKEA Group is led by its President COMPANIES
Delgado, Jonas Kamprad, Gran and CEO, Peter Agnefjll, together
Lindahl, Mark Newton-Jones*, with the Group Management In May 2015, IKEA Group signed
Lone Fnss Schrder and Ian team. The IKEA Group operates a letter of intent to sell its product
Worling*. Ingvar Kamprad, the distribution and customer distri- development, supply chain and
founder of IKEA, is senior advisor bution centres, shopping centres production companies, (IKEA of
to the Supervisory Board. The and stores. Sweden AB, IKEA Supply AG and
IKEA Industry Holding B.V. and
THE IKEA GROUP OPERATES STORES other connected companies) to
Inter IKEA Group. The new struc-
UNDER FRANCHISE AGREEMENTS
ture simplifies the IKEA franchise
Chairman of the Supervisory Board: Lars-Johan Jarnheimer
system and allows IKEA Group* to
President and CEO: Peter Agnefjll
The IKEA Group is one of 13 franchisees, operating
IKEA stores under franchise agreements with Inter IKEA focus even more on the customer
Systems B.V., the owner of the IKEA Concept and the and on development of multichannel
GROUP FUNCTIONS retailing and distribution.
worldwide IKEA franchisor. Inter IKEA Systems B.V. is
Commercial IKEA Business Business Navigation
based in the Netherlands and owned by the Inter IKEA
Solutions & Finance
Corporate
Group. Inter IKEA Group and IKEA Group are two sepa- The transaction was completed ac-
Communications Customer Corporate Finance,
Experience Tax & Treasury rate groups of companies with different management and cording to plan on 31 August 2016
HR
Marketing & Expansion Legal & Governance
different owners. All IKEA franchisees pay a 3% franchise and the transfer of ownership was
CUSTOMER Com&In Strategy, Process Property made through sale of shares. As a
fee to Inter IKEA Systems B.V. The franchise fee gives
FULFILMENT Sustainability & Organisation Risk Management
& Compliance us, as an IKEA retailer, the right to operate stores under result, some 26,000 co-workers be-
the IKEA Concept and IKEA brand. It grants access to came part of the Inter IKEA Group.
SERVICE FUNCTIONS systems, methods and proven solutions as well as staff
*As of 31 August 2016, the IKEA Group
trainings, manuals and updates of the IKEA concept such consists of three core businesses: Retail,
FINANCIAL ASSET MANAGEMENT as store layouts, fittings and display concepts. Shopping Centres and Customer fulfilment.
48

NORTH AMERICA
54 Stores
6 Pick-up and Order Points
7 Store Distribution sites
6 Customer Distribution sites
IKEA GROUP GOING FORWARD | GROWING IKEA TOGETHER 2020+ | COMPANY STRUCTURE | RETAIL AND DISTRIBUTION | GROUP MANAGEMENT & SUPERVISORY BOARD
RUSSIA RETAIL AND
14 Stores
14 Shopping Centres
DISTRIBUTION
It takes a well-planned global network to
1 Store Distribution site
distribute IKEA products in an efficient and
cost-effective way. Each facility across the
world plays an important role in making IKEA
products available to customers.
EUROPE
235 Stores
14 Pick-up and Order Points
24 Shopping Centres
ASIA 340
IKEA Group stores
30 Stores
16 Store Distribution sites located in 28 countries
2 Pick-up and Order Points
14 Customer Distribution sites 3 Shopping Centres The IKEA Group operates 340 stores in 28 countries
5 Store Distribution sites under franchise agreements with Inter IKEA Systems B.V.
In addition there are more than 40 stores run by other
franchisees.
AUSTRALIA
7 Stores
1 Store Distribution site
49
GROUP MANAGEMENT
Top Row, left to right
Giny Boer, Retail region South & East Europe
Steve Howard, Sustainability
Claudia Willvonseder, Marketing and Com&In
Peter Agnefjll, CEO & President
Gerard Groener, Centres
Marcus Baumgartner, Customer Fulfilment
IKEA GROUP GOING FORWARD | GROWING IKEA TOGETHER 2020+ | COMPANY STRUCTURE | RETAIL AND DISTRIBUTION | GROUP MANAGEMENT & SUPERVISORY BOARD
Bottom Row, left to right
Karin Skld, CEO Assistant
Stefan Sjstrand, Commercial
Michael Ward, Retail region North America & Scandinavia
Petra Hesser, Human Resource
Mikael Palmquist, Retail region Asia Pacific
Olivia Ross Wilson, Corporate Communications
Jeanette Sderberg, Retail region Central & West Europe
Lotta Lyr, Development & Expansion
Alistair Davidson, CFO
SUPERVISORY BOARD
Left to right
Lars-Johan Jarnheimer, Chairman
Tore Bertilsson, Board member
Ingvar Kamprad, Senior Advisor to the Board
Stina Bergfors, Board member
Lone Fnss Schrder, Board member
Luisa Delgado, Board member
Gran Lindahl, Board member
Jon Abrahamsson Ring, Board member*
Mark Newton-Jones, Board member*
Jonas Kamprad, Board member
Ian Worling, Board member (not pictured)*
*New member of the Supervisory Board from 29 November 2016
50